Three pillars that elevate procurement’s profile

A caterpillar is hardly noticeable, but becomes fascinating once it has developed into a colourful butterfly. Similarly, an invisible procurement function can exist, but fail to make meaningful contributions to its organisation and attract nothing positive, Jim Makuwa, Commerce Edge Academy Education Manager tells SmartProcurement.

According to Michael Porter’s Value Chain Model, each function must add value to the next functional area and in so doing an organisation achieves its goals and objectives.

In most organisations the procurement function becomes visible only when it begins adding value to its downstream and upstream functions, typically by lowering costs and ensuring the availability of raw materials, goods and services.

Procurement functions that remain back-office setups have failed to be visible in their organisations, and are possibly mere pen pushers used to rubber stamp the work done by other functions.

For example, if procurement is too slow to provide for the engineering’s specific requirements, forcing engineering to acquire on procurement’s behalf, then procurement is but a ‘confirmer of orders’ to facilitate payments.

Am l describing your procurement department?

Visibility of the procurement department rests on three fundamental pillars; (1) the organisation itself, (2) the procurement function and (3) the individual. However, similar to a three-legged pot that can prevent its contents from spilling only if its legs are the same length, there must be equilibrium between the fundamental pillars if procurement is to make a positive contribution to organisations.

One. The organisation. This refers to the nature of a business entity – the structure, corporate governance and ethical issues that build an overall view of an organisation and determine if other organisations, society and individuals would want to associate with the organisation.

High-potential suppliers are attracted to organisations with high-flying colours as this uplifts their own business profiles. Furthermore, the evolution of collaborative procurement relationships mean that in their journey to build sound relationships, suppliers will seek organisations that are visible in society and in the business environments in which they operate.

Similarly, unscrupulous dealings, in turn, attract unscrupulous organisations and individuals alike and they may be prone to corruption, fraud and nepotism.

Two. The procurement function. This refers to the function’s structure: its contribution to the business case; its ability to foster a sound relationship with its internal and external customers; how well its views are perceived by other functions; its ability to generate cost savings; and its ethical operation.

A function that rewards, attracts and retains talent is worth working for and you have to be talented for you to land an interview or let alone a job offer.

Three. The individual. Individuals represent the procurement function to the rest of the organisation, to potential business partners, within peer functional areas and within society at large. However, it is not certificates on your wall nor the number of accolades that forms others’ opinions; rather, adding value makes you visible in your environment.

Your talent will only be recognised if you use it to the benefit of others while achieving your goals and objectives. Your intuition and creativity must be put to good use to differentiate yourself from your predecessor, who may have been known as a pen pusher or a domain individual. Only by putting your talent to good use will organisations, individuals and peers begin to appreciate you.

What is your value proposition that makes you visible as an organisation, function or individual?