Procurement professionals state they do not have a strategic role in board meetings
Today’s post is from our SafeSourcing Archives!
Many procurement professionals state they do not have a strategic role in board meetings or with major organization decisions. Why should a procurement professional participate in board meetings?
Companies that do not engage their procurement department early in the process are failing to make effective purchasing decisions, not fully leveraging their spend and economics of scale, and opening themselves to commercial risk. Procurement is usually brought into the process to either close a deal or execute the contract; at this point it is too late to add significant value.
Common issues corporations face when procurement has little engagement within the department:
• Spend is spread thin throughout multiple categories and suppliers.
• Process improvements (make vs. buy) are not always the ideal cost-savings decision
• Procurement policies are lacking – leading to no contracts, multiple price points, etc.
Handling these internal issues is not a day’s job. Procurement will need to monitor and track compliance with policies within departments. Departments that do not comply will be held accountable. Many times the CPO will need to become involved in this initiative to place more focus on the value of procurement.
In turn, this will also require procurement to refocus their efforts to include other value-added services to the departments besides simply reducing costs. However, this usually requires a change in culture, taking procurement away from the tactical, category-focused culture that dominates most functions, to one that is fully aligned with the company’s goals.
At SafeSourcing, we are an extension to your procurement department. We will work with procurement and other departments to help avoid the common issues when procurement does not have a chair at the table. Please contact us in order to find out more.
We look forward to and appreciate your comments
