Effectively positioning procurement within an

organization

Source: (www.michaelpage.co.uk, 2019)

https://www.michaelpage.co.uk/our-expertise/procurement-and-supply-chain/effectively-
positioning-procurement-within-organisation

Driving value and having a greater impact on revenue is key in helping shape the perceptions
business leaders hold about procurement as a business function.

Position procurement as a strategic, value-adding player in the business

When asked about how procurement should be positioned, Al explained that we need to be
“positioning procurement as a strategic value-added player in the business and not
transactional”.

Procurement is not and should not be viewed as a transactional function. Al explains: “If we act
transactional that’s how the business treats us and that’s how we’ll be perceived by the
business.” To overcome this, it’s important to add value to the business and we can do this
through a number of ways.

Align to business metrics

Every business has an overall strategy and specific goals to achieve. Al highlights that it is
important to make sure that: “We align to the key business metrics or the key business outcomes
that are important to the overall business strategy.” This might include the financial metrics such
as profitability.

He also added that risk is often a key metric for businesses as well, so be sure to align to the
organizational risk tolerance and risk temperament.
“Speak the business’ language. Speak their outcomes, their success measures. Speak in their
terms, and leave procurement jargon to procurement settings.”

Be consultative and helpful

Al states that: “Procurement needs to be consultative, it needs to be in a position of influence, it

needs to be helping the business, it needs to be sharing perspective, market knowledge, helping
shape strategy.”

It’s not uncommon for the procurement function to be the communicator and enforcer of certain
policies. This is an opportunity to help the business. Procurement should be the function to help
the overall business be compliant with policies, and a myriad of different steps and checks in the
process, rather than simply issuing a policy and expecting the business to comply.

Innovation is key

Innovation within procurement has been highlighted by Al as the key to driving change, along
with frictionless procurement. He often seeks to employ leaders who have innovative approaches
to problem-solving. This encourages innovative thinking throughout the organization as it filters
into their teams.

Leaders use innovation Al says: “To get the best value out of what the organization needs to
procure, service or product or otherwise, to operate and to deliver its service to the customer.”
So, individuals who are willing and able to embrace change are essential.

Innovation also plays a vital part in attracting talent. People want to be a part of organizations
which encourage and support innovative thinking to problem-solving.

Matthew Friend, Associate Director at Michael Page Procurement and Supply Chain, comments:
“As the landscape of procurement changes and with the separation of transaction services, the
ability to add value to customers becomes critical and the approach becomes more and more
important.”

He suggests asking yourself key questions surrounding innovation within your business.

 For businesses; how much does your organization reward and recognize true innovation?
 For leaders; how do you reward and recognize your teams for doing these kinds of activities?
 And for individuals; are you delivering these innovative solutions?