Procurement is likely always going to have savings among our performance metrics, and that has been a source of concern and frustration for years. It has created the impression (sometimes justifiably) that procurement cares about savings above all else, and therefore any sourcing project or contract that goes through procurement will end up being all about savings, despite the other business objectives that should be included.
Art of Procurement ran an AOP Live session with Corcentric and Alliant Credit Union to talk about how the emphasis on savings may be hurting perceptions of procurement, and how procurement can address those perceptions while still delivering savings. Philip Ideson had the opportunity to ask Joe Payne, SVP of Source-to-Pay at Corcentric, for his advice on how procurement can change the conversation about savings by focusing on what ends up happening to the money.
Joe illustrated his point of view using the time-tested ‘apples-to-apples’ comparison that procurement is so familiar with. Only, in this case, Joe wasn’t talking about comparing suppliers or bid proposals, he was comparing traditional notions of procurement capabilities with the full range of value we can deliver.
“We always talk about ‘apples-to-apples’ conversations. If all they’ve ever seen is an apple, they don’t know that an orange can possibly exist within that space. And so that’s where, if that isn’t the perception at the C-level, procurement should proactively go in, to talk to them about what we know good procurement can be and talk in terms of business outcomes first.”
Here at Art of Procurement, we’re fond of talking about the ‘art of the possible’ with regard to procurement’s potential. Sometimes we’re challenging ourselves to establish a vision, and in other cases we’re working with executives, stakeholders, budget owners, or suppliers to help them establish their own.
When procurement realizes we’re speaking with someone who has only ever seen apples, the best path forward is to:
- Acknowledge their experience and give them space to talk about what they have been through in the past. Not only will this position procurement as a strategic partner, it may gather critical information to inform the conversation moving forward.
- Constructively challenge preconceived notions that don’t align with procurement’s capabilities or aspirations. Helping each person begin to visualize the potential associated with an ‘orange’ may open the door to different types and tones of engagement with the business.
Listen to the full podcast here: