Procurement is often an under-appreciated function. They are responsible for the risk and management of every supplier relationship, yet often don’t have the time or resources to go above and beyond their traditional responsibilities as a savings-engine.
Consider the stakeholders’ perspective. When procurement is in its early stages at a company, it can seem like they
are only taking buying control away from internal stakeholders. Then when contract renewals come around, procurement’s priority of savings can hamper a supplier’s ability to serve the stakeholders who rely on them. This trend can build resentment from stakeholders who are tasked with delivering value for customers. Whether perceived or real, price cuts lead to supplier concessions on team talent, innovation and dedication given to your business.
Thus the question, is your procurement function perceived as a champion or a saboteur by the stakeholders who work with each supplier? Here are some signs of each:
A stakeholder champion:
- Calculates the complete ROI of each supplier relationship.
- Leads new opportunities for supplier innovation.
- Values stakeholder feedback on suppliers as much as operational metrics.
- Proactively mitigates issues before they become crises.
A stakeholder saboteur:
- Prioritizes and self-promotes the savings delivered on each supplier relationship.
- Doesn’t communicate supplier changes and news to all impacted stakeholders.
- Forces buying from one supplier when alternatives provide better value.
- Favors a decision-maker’s supplier opinion over frontline stakeholder frustrations.
Although procurement has a duty to the organization as a whole, their daily actions directly impact the stakeholders who work with each supplier. Knowing where we stand with our stakeholders, we can position ourselves more as value creators rather than value saboteurs.
When gaps exist with stakeholders it is often a symptom of larger supplier relationship gaps. If you’re experiencing stakeholder frustration or unable to proactively document supplier feedback, learn more here.
What challenges do you have with stakeholder engagement? We welcome your examples in the comments below.