How CPOs can Secure Seats at Strategic Tables
CPOs have successfully gained their seat at the table. Now, they need to maximise this advantage.
By improving collaboration with stakeholders and other functions, Procurement can not only maximise the benefits it achieves for the company as a whole, but also gain a reputation as a critical value-driver.
In a recent report, Effective stakeholder alignment strategies for CPOs, Fairmarkit shared its insights into the importance of cross-functional collaboration - from a Procurement perspective - and how the function can maximise the benefits that it unlocks.
The discussion was developed through a workshop - hosted by Pierre Mitchell, Chief Research Officer and Managing Director at Spend Matters - that included the likes of Boeing, bp, SDI, Materion, Maxar, Las Vegas Valley Water District and Sonoco.
Within the report, they identified 10 key strategies that CPOs can use to more effectively align with stakeholders, and secure that all-important seat at the strategic table.
Below, we have listed 5 of these takeaways, and summarised the approach that Fairmarkit recommends.
1. Set policies for involvement
Shape and implement policies that confirm how Procurement will be involved.
This includes delegating roles, and communicating these responsibilities to everyone involved in key processes (both those within Procurement, and stakeholders from other functions).
These policies must be dynamic, and be carefully tailored to suit the company’s specific needs and operations.
The stakeholders should also be involved in designing these policies.
2. Procurement secures a role in wider innovation projects
Procurement should gain a role within company-wide initiatives, including innovation and transformation plans.
This should include: product design and development, supplier innovation programmes, digital and technological innovation programmes, value analyses, and sustainability and social responsibility projects.
‘The earlier Procurement is involved in these various business strategies, planning, and transformation activities, the better Procurement can prepare and gather market insights, thus adding more value.’
3. Track customer experience
Assess Procurement in terms of its influence on SXM, plus company-wide spending and outcomes.
To this aim, customer experience and engagement should be measured and tracked. This can be achieved through feedback gathering.
Spending and spend influence with suppliers should also be tracked and assessed.
Is the company a customer of choice amongst its key strategic suppliers?
4. Align Procurement to stakeholder metrics
Ensure Procurement is aligned with stakeholder metrics, such as spend metrics and supplier performance metrics.
These metrics will ensure that Procurement is becoming increasingly recognised for the value that it contributes to the business at large.
For this to be achieved, clean data and efficient data management are essential.
“Any time we’re bringing on a new technology or evaluating a change, I bring my stakeholders in early. I want them to be partners early on in the process so they can also champion change as needed. This is true not just for potential champions - You also want to identify any potential detractors and give them a seat in your steering committee or planning team so that any difference in opinion is tackled upfront and you are building allies as you go.” Jim Haining, Purchasing Manager, Las Vegas Valley Water District
5. Efficiency, flexibility and agility
These approaches are all key to maximising value generation.
Success requires a long-term commitment to transformation.
Procurement needs to ensure that the rest of the company is familiar (and on board) with its targets.
Then, these targets should be used to demonstrate the ongoing success of the function, and strengthen Procurement’s alignment with stakeholders.
Procurement should also consistently benchmark itself against these targets, and track its improvements over time.
“Our Procurement team is focused on running a tight ship while also providing value to business stakeholders along the way. To summarise, gain trust with the right toolset and a value-oriented team culture and then continuously refine your policies so that stakeholders always know what to expect. This is how we consistently achieve less than a half percent of rogue spend.” Jim Haining, Purchasing Manager, Las Vegas Valley Water District