Procurement: The Unsung Heroes of Business

In the business world, one group of professionals often remains unnoticed, despite playing a crucial role in the success of organizations. Procurement professionals, those responsible for sourcing and managing the supplies and services that companies rely on, have been silently steering businesses through turbulent times, and yet, we are overworked, underpaid, and undervalued. This article sheds light on the challenges we face, the positive shifts in perception during the COVID-19 pandemic, and the pressing need for recognition and support within the industry.

The COVID-19 Challenge

The outbreak of the COVID-19 pandemic turned the world of procurement upside down. In the face of unprecedented supply chain disruptions, procurement professionals rose to the occasion, displaying resilience and adaptability to deliver despite numerous constraints. As a result, the perception of procurement has improved significantly, with a staggering 63% of professionals acknowledging a positive change in the past 12 months.

Perception is Power

An improved perception of procurement is a promising sign, as it can lead to easier buy-in from internal stakeholders and external suppliers. With an impressive 69% of professionals reporting that their directors and heads of other departments now value procurement, the opportunity arises to build more efficient and resilient supply chains, further enhancing the industry's reputation.

The Persisting Anomaly: Underappreciation and Underinvestment

Despite the improved perception, procurement professionals are yet to see their value translated into increased wages and budgetary allocations. This is particularly perplexing considering the pivotal role we play in the financial health of organizations. Suppliers spend accounts for 20-40% of total company spend, and procurement influences 40-80% of every sales dollar, yet it remains disheartening to see that procurement receives less than 1% of budget allocation.

Addressing the Root Causes

Lack of Training: A Barrier to Unleashing Potential

In the rapidly evolving landscape of procurement, it has become increasingly clear that traditional training around compliance issues falls short of preparing professionals to unleash our full potential. To truly excel in their roles, procurement professionals need comprehensive training that delves deep into the science of procurement. This means going beyond basic processes and regulations to understand the intricate dynamics that govern the procurement ecosystem.

Procurement science encompasses a wide range of topics, such as advanced analytics and data-driven decision-making, risk management strategies, cost optimization techniques, and supply market analysis. By empowering procurement professionals with this knowledge, we can make more informed and strategic choices, leading to greater efficiency and value generation for our organizations.

A deeper understanding of procurement science also enables us to navigate complexities within the supply chain, anticipate potential disruptions, and identify opportunities for innovation. Armed with this expertise, procurement teams can make proactive decisions, mitigate risks effectively, and contribute significantly to the overall growth and resilience of their companies.

Mastering Supplier Management - Becoming the Customer of Choice

In the modern business landscape, successful procurement is not just about sourcing the right goods and services at the best prices. It also entails cultivating strong and mutually beneficial relationships with suppliers. This highlights the need for dedicated training in supplier management, equipping procurement professionals with the skills to nurture long-term partnerships.

Effective supplier management goes beyond transactional interactions; it requires understanding suppliers' capabilities, aligning goals, and fostering a collaborative atmosphere. By training procurement professionals in supplier relationship management, we can develop the ability to identify strategic suppliers and build robust partnerships that lead to innovation, cost reductions, and quality improvements.

Additionally, becoming the "customer of choice" for suppliers is crucial for accessing top-tier suppliers and ensuring preferential treatment. Training should emphasize how to enhance the organization's reputation in the eyes of suppliers, creating an environment that attracts the best vendors and secures favorable terms.

Speaking a Common Language - Streamlining Communication and Processes

Clear and effective communication is the backbone of successful procurement operations. Training should focus on ensuring that all stakeholders within the procurement ecosystem speak a common language, from the way bid packages are structured to supplier reviews and the words used in all interactions.

Standardizing communication practices enhances clarity, reduces misunderstandings, and improves overall efficiency. This includes developing standardized templates and guidelines for procurement documents, as well as ensuring consistent terminology across the procurement team and with suppliers.

Furthermore, aligning the language used in procurement with the broader organizational objectives ensures seamless integration with other departments, such as finance, legal, and operations. When everyone is on the same page, it fosters better collaboration, streamlined decision-making processes, and ultimately leads to a more unified and effective organization.

Procurement Executives Must Showcase Value

Procurement executives play a pivotal role in shaping the perception of the industry. Rather than focusing on explaining what procurement does, they need to pivot towards demonstrating how their work directly impacts the organization's bottom line and share price. Adopting a data-driven approach can be instrumental in showcasing the tangible contributions procurement makes to the company's success.

Conclusion

Procurement professionals are the unsung heroes of the business world. Our resilience during the COVID-19 pandemic and pivotal role in the success of organizations demand greater recognition and support. While the perception of procurement has indeed improved, the industry must now work towards translating this into fairer wages and increased budgetary allocations. Addressing the challenges of training and skill development, along with a shift towards data-driven value demonstration by procurement executives, can unlock the true potential of procurement professionals. It's time for businesses to acknowledge the indispensable role of procurement professionals and ensure we are no longer overworked, underpaid, and undervalued.