Four Ways Leaders Can Continue the Rise of Procurement

Recent world-changing events, such as the pandemic and Brexit, have triggered awareness of the value the procurement function brings and showed the difference that comes from giving procurement leaders more influence at board-level.

According to Deloitte’s 2021 CPO survey, agile, high-performing companies perform better when procurement has a higher “quality of influence”, both with stakeholders and C-suite executives. Firms that have a board voice are 50% less likely to experience poor C-suite support when shifting to a more strategic function.

Over two-thirds of procurement leaders are involved in stakeholders’ decision-making across off-shoring/outsourcing, financial planning and budgeting, make vs. buy, and corporate risk management ­– with a 10%-23% increase compared to 2019.

However, “the trick is in understanding how to leverage executive support to increase the quality of influence across the organisation”, said the report.

Here are four ways procurement professionals can help the function continue to rise in importance and gain C-suite level representation:

1. Integrate with other departments

Stephen Whyte, managing director at supply chain software firm QADEX, said:

“Procurement needs to integrate more closely with other functions, such as ethical sustainability and technical departments, rather than operating in silos.”

“If procurement integrates with other departments and teams that also have an interest in what’s happening in the supply chain, they will have more influence.”


Peter Smith, procurement author and founder of consultancy Procurement Excellence, added that if we’re more involved in product development then the company can improve its sourcing and demonstrate value. For example, internally collaborating with scientists, production or car designers to help guide specifications in alignment with corporate risks.
2. Build awareness of the career path

Andy Neilson, founder of procurement consultancy Twisted Orange and commercial director at Novo-K, highlighted that the profession should market to the aspiring youth and show them how buyers and supply chain leaders are a key foundation in society.

“We’ve got to clarify to people that procurement is as much a career as sales, finance, HR, or being an astronaut. Procurement needs to be seen in the same light, and become, almost, a goal profession.”

“The world needs to see procurement as an added value function, not a cost-cutting function. It’s down to organisations that recognise procurement and have board presence to continue to have that faith and support,” said Neilson.



3. Revenue generation

Only around half of CPOs (46%) were able to meet or exceed revenue generation and speed to market plans over the last 12 months, according to Deloitte, suggesting companies haven’t fully leveraged procurement as a tool for building new profit streams.

Smith commented: “The best procurement functions are talking more about how they can support revenue generation. For instance, we can collaborate with suppliers to come up with some innovative new packaging that is more sustainable, looks great on the shelf and meets customer demand to increase sales.”


Of CPOs were able to meet or exceed revenue generation in the past year

4. Changing perceptions and ensuring full oversight

Anne Kilimatinde-Mokua, supply chain management strategy lead at oil and gas firm Tullow Oil, said: “Previously, procurement has just been seen as a blocker or police officer. The challenge is proving the function as a strategic partner that builds value for the business, either through harnessing technological solutions which make processes simpler and more efficient and give buyers more control, or by identifying opportunities for innovation with suppliers.”

Smith added: “We’ll get more of a voice at top-level by being a function that’s a key contributor to the organisation in terms of issues such as purpose and sustainability. Procurement has an opportunity to contribute beyond basic price and security of supply.”

Businesses benefit from having the combined oversight from a chief procurement officer and chief finance officer, said Peter Bolle, former senior strategic procurement manager at Air Canada. “One person that has oversight over the entire supply chain – tactical procurement and strategic Procurement – is important for communicating risks and aligning operations with the company’s vision,” he added.
Words by Lucy Patchett



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