- Truth? The size of a pool of spend by either category or supplier determines its importance to the enterprise. This mindset drives our focus on bringing the maximum amount of spend under management, usually via a top-down approach or using the 80/20 rule.
- Truth? Supplier consolidation is an optimal practice because the more volume procurement can leverage with a given supplier, the more influence we have with them and, therefore, the more value we can generate for the enterprise.
- Truth? Procurement’s primary mode of collecting information from suppliers is the RFx, a highly efficient (and sometimes automated) tool for supporting ‘apples to apples’ proposal comparisons, selecting the best supplier and putting effective contracts in place.
- Truth? Although it is unpleasant and challenging at times, it is natural for procurement to have an adversarial relationship with internal stakeholders. This is the logical consequence of us effectively fulfilling our role as objective arbiters of spend utilization.
Challenging Ourselves: Be the Change
If we mean what we say about transformation, we have to be willing to question everything procurement does and how we do it. While procurement clamors for ‘transformation,’ I sometimes suspect that we are secretly hoping the solution will actually involve the rest of the organization awakening to the brilliance of our wisdom, and that they—not us—will do the majority of the changing.
Unfortunately, that scenario is unlikely to play out in reality.
I believe there is a correlation between the type and scale of the changes generated during a transformation process and the associated increase in benefits. As a practical matter, the closer to home the changes hit, the more radically they will shift what procurement is, what we do and the value we generate. It also means they will be more challenging to take on.
I’m not suggesting we are doing anything wrong, or that procurement needs to be ‘fixed.’ My intent is to further procurement’s honest desire for transformation by focusing attention and energy on the fundamental truths of traditional procurement - and evaluating which ones need to be retired.
It is important, therefore, for us to step back and challenge the things that procurement does every day, especially the things that have become ‘generally accepted procurement thinking.’ We may even do some of these things without thinking about them; they are ingrained and instinctive. Unless we are willing to alter our core beliefs – or at least question them – any transformation we engage in will only produce a minor shift, at best.
Talking about ‘beliefs’ and ‘truths’ may be foreign or uncomfortable for those of us who are perfectly at home with spreadsheets and quantitative evaluations. If we are to actually transform procurement, however, it is critical that we step up. Transformation only applied to processes and tactics would be easy to execute; the real value of engaging in a transformation exercise is mined from altering how we think about ourselves and our role in the enterprise.
Before we can affect our impact on operational performance, we must determine which ‘truths’ are holding us back. If we are to be catalysts, our journey begins by scrutinizing each ‘truth,’ not shielding long-held beliefs or conforming to a traditional way of doing things.
In this series, I will challenge a number of the fundamental procurement ‘truths’ that have taken hold across companies and industries. For example:
Procurement has long desired a fundamental shift in how the rest of the organization views and treats us. But should that be the highest priority of a transformation process? If we are honestly interested in making a meaningful difference, we first have to look within and challenge our own generally accepted truths. Procurement must be willing to lead by example. As Gandhi said, “be the change you wish to see in the world.”