Success in a Non-mandated Procurement Environment

Many procurement organizations have non-mandated procurement environments. This is especially common in the fast growing, high-tech industry. Some procurement professionals may not flourish culturally because they are not able to fully utilize their education and training. Additionally, they may miss the more strategic aspects of procurement that drive excitement for the profession. Examples include developing procurement policies and procedures, developing category and sourcing strategies, and value engineering.

Align with the culture, goals, and strategy of your organization

It is wise to understand the culture, goals, and strategy of the non-mandated procurement organization before accepting a position. Accordingly, ask yourself if you will thrive in the organization’s culture. You must align your goals and strategy with the company’s. Non-mandated organizations may not fully appreciate the value of procurement. Procurement mandates often form out of necessity. If you are in a less mature organization, chances are, procurement is viewed as a tactical function. Procurement policy and procedure mandates may be seen as an attempt to stifle innovation and growth.

Transition tactical workload

There are still opportunities to drive the value of procurement in a non-mandated environment. If you are currently operating as a tactical procurement organization, you will need to get out from under the transactional workload. Shift tactical workload to employees or contractors dedicated to this workstream and consider automation and outsourcing options. This will allow you to focus the time of strategic employees on building business partnerships with key stakeholders.

Build a Bridge

Different areas of the business may have similar needs or even utilize the same suppliers. Show your value by completing a spend analysis of your organization to share with your stakeholder groups. Identify opportunities for supplier consolidation and to eliminate excess spending. Conduct supplier surveys to build preferred supplier lists.

Identify “Value of Procurement” Ambassadors

Start with an area of the organization that is already supportive and open to the role of procurement where you can create value. Spend your strategic time focused on providing customer service to this function turning them into a champion of procurement to other areas of the organization.

Perform a needs analysis for your stakeholders

While your stakeholders may understand their needs and budget, without an understanding of procurement levers, they may be overpaying or purchasing unnecessary services, features, or add-ons. Performing a needs analysis will help you to understand their requirements so you can obtain the best value for their needs.

Show them your wins

Encourage requesters to avoid pre-negotiating pricing, encouraging them to manage the supplier relationships while allowing procurement to maintain their leverage and utilize their expertise to negotiate pricing and business terms. Showcase prior wins to your stakeholders and provide them with a solid business case for how you can create similar value for them.

Aligned to the culture, strategy, and goals of your organization, you will be a recognized business partner and procurement will continue to advance its purchasing power, improve cross-functional relationships, and help reduce risk for your organization.