Influencing The C-Suite In The Light Of Procurement’s Newly Elevated Position
In recent years, trends such as globalisation and increasing levels of digital transformation have been forcing changes in the ways that organisations operate, and manage their lines of acquisition and supply. Such developments have served to emphasise the important role that procurement plays in enterprise operations. Today, the impact of the COVID-19 pandemic has truly shone a spotlight on the critical importance of procurement in sustaining the path to survival and growth, for organisations worldwide.
Once looked upon as simply a cost-cutting function, procurement is emerging as the principal enabler in sourcing critical goods and services, and therefore a major contributor to corporate strategic planning and decision-making at the highest level. In this article, we’ll be looking at a number of ways in which senior procurement professionals can influence the C-level, in light of the procurement function’s elevated reputation following COVID-19.
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A Higher Profile For Procurement Due To COVID-19
COVID-19 has been disrupting industries, causing market volatility, and impeding supply lines on a global scale. With the movement of goods and services critical to both pandemic response and efforts at economic recovery, the COVID-19 crisis has thrown the importance of supply management into a new light. Critical vulnerabilities such as a lack of flexibility, agility, and visibility have been plaguing supply chains worldwide, with many organisations slow or unable to adapt.
In responding to the challenges of the pandemic, procurement practitioners have been thrust to the forefront of a battle to sustain critical lines of communication and supply. With “supply chain” now a hot topic in both general and social media discussion, the efforts of procurement in devising alternatives and work around strategies to cope with supply management disruptions have also not gone unnoticed. This attention extends to the executive boardroom, and the overall effect has been to elevate the importance of the procurement function.
Influencing The C-Suite
Higher profile aside, the success of procurement in implementing the rapid and often innovative changes required for dealing with a disruptive environment depends on having support from top management, and a mandate to act swiftly. Some industry observers note that, in order for this to happen, Chief Procurement Officers (CPOs) must have a secure seat in the boardroom, and the unfettered authority that they need to effectively do their jobs.
For enterprises, there are compelling business reasons for granting procurement a permanent seat at the top executive table. Among these are quelling the fears of chief executive and chief financial officers around not only an organisation’s purchasing actions, but also concerning broader issues of sustainability, transparency, ethical procurement, and efforts to prevent bribery and corruption.
Support from the C-level gives added authority to procurement change management initiatives, and gives procurement officers greater scope to increase or broaden their expenditure. Such support also gives procurement greater opportunities to collaborate with other parts of the business.
Close collaboration and communication with suppliers are key to providing full transparency of the supply chain, and in enabling procurement to identify early indications of problems that may arise in the future. Facilitating the mechanisms that enable procurement to function as the intermediary between an organisation and its supply is one of the key ways in which enterprises can empower procurement to enhance supply chain resilience.
With only 38 percent of best-in-class organisations currently developing supply risk mitigation strategies, practitioners must have a greater understanding of the risks associated with procurement, such as market volatility, the complexities involved in switching suppliers, and the business impact of various negative scenarios that may arise.
To build relationships with senior management and gain the support of the C-level, CPOs should engage in regular one to one communication with other stakeholders in the executive suite. This will enable procurement to stay informed on matters affecting the business at large, while keeping senior managers abreast of procurement’s latest initiatives.
Bringing lower level procurement team leaders along to management presentations and letting them outline their current activities allows senior management to become familiar with both your procurement initiatives, and the personnel involved.
Documentary evidence in the form of research from recognised authorities in the procurement space can be instrumental in swaying the opinions of senior executives who value facts and figures.
In addition, it’s important to be able to speak the language of the C-Suite. This emphasises the need for procurement practitioners at all levels to understand the wider implications of the corporate mission and business objectives, and how procurement projects are linked to these principles and goals.
Finally, being able to demonstrate a track record of success in areas such as cost savings or process innovation will strengthen the hand of procurement in seeking trust and buy-in from senior management.