Procurement departments often cite a lack of engagement from the wider business as a key reason for why they can’t add more value to their organisations.
Stakeholders progress workstreams and discussions with suppliers without involving procurement, goes the argument. This is certainly true in many cases, but why do non-procurement colleagues choose to take this approach?
Evidence from a recent study conducted by Efficio shows that procurement is not only contemplating this question but believes it has a role to play in addressing the problem. When asked about their top strategic priorities for the next five years, the single most popular response from the 225 procurement leaders surveyed was improving customer experience (18%). Two in five respondents (40%) ranked it among their top three priorities.
Lagging behind personal experience
Before looking at how to improve the experience of dealing with procurement and making it more user-friendly in the future, it is worth understanding in more detail where we are today.
We live in an age defined by technology innovation, and this has transformed many aspects of our personal lives, including the way we buy. It’s possible to use our phones to search for and choose almost any product we want and — by comparing prices and suppliers and reading customer reviews in just minutes — feel confident that we are getting a good deal.
When we go to work, however, the buying process is far more cumbersome. You are expected to talk to someone from procurement who often tells you what to buy and who to buy it from. And the lead time of that conversation can be long.
At a recent event to launch our survey results, Jan Fokke van den Bosch, CPO of HSBC, summed it up: “We all buy online at home, but how would we feel if somebody, a stranger, were to sit next to us on the train and start telling us what to purchase? That is the process we have been running in procurement for too long, and it’s not sustainable for much longer.”
One way of enhancing the procurement user experience is to allow the business to self-serve more frequently to meet their procurement requirements. Technology is the way to achieve this, but care is needed.
Oftentimes, procurement purchases technology for itself rather than implementing a solution with the business user in mind. For example, a company may invest in a sourcing tool to help it run requests for proposals (RFPs), but without thinking about how it will make the lives of stakeholders easier, it’s unlikely that the experience of dealing with procurement will be much better than before the tool was introduced.
In this example however, procurement could load the tool with content over time, including pricing models for key categories, contact details of pre-screened suppliers, a selection of the most common bid comparison scenarios and historical price benchmarks. With value-adding content, stakeholders can now use the tool to source many of their requirements by themselves and achieve a better outcome than they could before.
Meanwhile, procurement’s role can shift from process policeman to curating and refreshing the content based on feedback and evolving business needs — without becoming a bottleneck in the sourcing process.
Providing data insight
Another way to increase the customer satisfaction of procurement is to be a provider of insight and foresight to the business.
Again, technology is a key enabler, but it is first important for procurement to do its homework and understand what the business wants to see and to help them use technology to achieve this, rather than falling into the trap of only collecting data required for internal reporting or prioritising activities.
For example, procurement might identify some specific supplier performance data as critical to managing the risks related to certain key suppliers. By working with suppliers and the business to introduce a process for quality data capture and deploying technology for automation and to visualise the insights, procurement can put this information directly into the hands of business stakeholders. These stakeholders can use the insight to make more informed, data-driven decisions about their suppliers and manage risks more effectively.
As a source of valuable information, procurement can create a pull for its services and position itself to have greater impact, but it needs to ensure there are strong feedback loops concerning data quality so that credibility is not undermined.
Getting procurement out of the way
Ironically, ensuring the business is more engaged with procurement is likely to involve getting procurement out of the way in the long run and redefining the service it offers as a provider of insight. Technology will play a central role in this transformation, but it needs to be deployed with the customer in mind to achieve that user-friendly experience.
This article was originally published by Spend Matters.