By Gordon Reid, Lead – Transparent Procurement Advisory Programme
One of the first things that I learned when I started my unplanned career in Procurement is that you cannot do it alone. Besides the team that you work with, you also need support and buy-in from people across all departments of the organisation for Procurement to make a real impact on the business.
Each organisation will be different but, based on my experience, here are seven departments in an organisation where I believe it is essential for Procurement to have a strong working relationship with key individuals.
1. Finance
Many Procurement departments report directly into the CFO, so if you want your voice to be heard and more importantly understood, make sure that you have a solid relationship with the Finance team.
Moreover, a lot of your Procurement data originates from Finance – for this to be accurate, you need to have direct input in the finance space when it comes to systems, naming conventions and suppliers. For example the ERP system: Procurement input is critical to ensure that you are able to derive maximum benefit from the relevant features.
Products and services need to be named consistently according to an approved naming convention, enabling allocation of Procurement spend into well-defined categories and reporting how, where, when and by whom products and services are being procured.
If you don’t have fans and supporters in Finance, you are going to be sitting in the back benches.
2. Marketing
This category can take up a large chunk of an organisation’s budget and is often one area where the budget is seen as a target – not a guideline. Marketing includes many sub-categories of spend where duplication and a lack of consolidation can often result in unnecessary and wasteful expenditure.
Having a good relationship with the Marketing team is important if you want to be called on to provide suggestions and help them come in under budget, rather than on target.
3. IT
A sometimes sensitive area with lots of personal preferences and IT boffins who do not really want to hear from Procurement. This is typically a high spend department where decisions are made that can have big financial impacts far into the future. Procurement should be working closely with the IT decision-makers: providing impartial input and ensuring that all considerations are soundly researched.
Do not forget the data. If you want decent Procurement dashboards based on a clean database pulling real time information, it certainly helps to have a few supporters in IT.
4. Operations
Operations Procurement can be compliance-driven through rigid policies and procedures, but personally I have found that a little flexibility and understanding often produces great ideas. If you want operations to trust you, it is better to work with these frontline people, help them out and make them look good.
5. Legal
When it comes to NDAs, supplier agreements, tenders and the like, it makes sense that you have your go-to person in the Legal department for when you most need it. Procurement should be keeping tabs on the contracts register so that you know when contracts are due for RFP preparation.
Having someone in Legal who gives you the heads up on contracts that they have been asked to draft, that may conflict with something else you are busy with, makes good sense. Procurement must have friends in the Legal department.
6. HR
Ideally, Procurement has the type of relationship with HR where they can call on you for discreet advice and input. Do not underestimate the value that Procurement can add to the HR department. HR must be able to confide in Procurement and to do this you need to have a good relationship with them.
7. Logistics
Depending on the business, Logistics could be one of the biggest spend areas. From trucks and fuel to warehousing and forklifts, getting a handle on this multi-category spend area can be challenging. Without the support and cooperation of the Logistics team, tracking the spend will be challenging. Working closely with key people could lead to massive savings.
Never mind what your title or position is in the organisation: if you can (learn to) communicate with decision-makers, you will be respected and heard.
Do not try and go it alone.
For more information, please contact Gordon Reid (+27 82 944 4101 or gordon.reid@transparentsa.co.za) or Mieka Cleghorn (+27 60 723 0889 or mieka.cleghorn@transparentsa.co.za)
