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Two Ways to Support Business Partners Who Make Their Own Purchases

Procurement teams are not involved in every purchase at their company but it pays to help; it keeps costs down and gives Procurement more time to work on higher value projects

For a whole range of reasons, including an increasing comfort with technology and working in more dispersed workforces that require collaboration outside of any formal reporting relationship, line managers often make their own purchases of business products and services, rather than asking the procurement team to do it for them.

But when they do, they still need support from Procurement; either some judicious guidance or full intervention to keep them from getting frustrated or making mistakes. Keeping business partners involved in this way will also improve what procurement teams call “sourcing discipline” (i.e., getting value for money), as if business partners carry out a purchase themselves, it gives procurement teams time to find new ways of reducing costs and to work on more high-value projects.

Make it Easy

The best way to make all of this work is to show business partners how Procurement’s help will lighten their workload. Only a quarter of business partners (26%) prioritize collaboration with corporate functions when they understand the value of doing so, but 74% say they will prioritize collaboration when it makes a process easier, according to CEB data.

Two steps will help the procurement team make sourcing easier for stakeholders.

  1. Assign sourcing execution leads: Procurement category managers are responsible for guiding business partners through the sourcing process. But only 20% of them excel in the skills required to make sourcing a positive experience for stakeholders.

    One procurement team in CEB’s networks addressed this deficit by assigning a few of its employees to be “sourcing execution leads” to help business-partner buyers.  Their duties were to preempt inefficiencies and stall points in stakeholders’ purchases, making sure those stakeholders have a positive customer experience from the start.  While business partners should manage most purchases themselves, sourcing leads step in on purchases that are likely to be more complex or frustrating.

    Category managers still work on less urgent buys themselves. To determine whether a category manager or a sourcing lead should handle a buy, Procurement developed a scorecard that assessed the likelihood of a purchase’s negative effects on stakeholders if it was handled poorly (see chart 1).  Senior leaders verified these scores to make sure their teams are on the right track.

    Post-purchase, sourcing leads caught up with the relevant category manager to brief him or her on what happened. As a result of all of this, Procurement reported that business partner satisfaction improved significantly.


    Chart 1: Buy prioritization scorecard  Illustrative buy  Source: CEB analysis


  2. Pinpoint delays to know when to step in: Procurement teams should ask business partners what frustrates them about working with the function and – whether accurate or not – it’s likely the word “slow” will come up.

    One problem with the way Procurement typically engages with stakeholders is that it only polls them about their experience after the fact—meaning the function misses the chance to take action when delays are occurring.

    The procurement team at one manufacturing company used sourcing process Kanban boards, which are a popular efficiency tool in operations and manufacturing, originally developed by Toyota in the 1940s. The boards display color-coded tickets that showed progress and identified delays that could affect business partner experience.

    The function could then take action on business partners’ own purchases when it spotted a slowdown.  This meant that while stakeholders managed buys themselves where possible, Procurement could step in when necessary.

    The tracking also highlighted systematic issues — such as purchases perennially remaining stuck with a certain staff member, or at a certain stage — so Procurement could address broader problems.

 

More On…

  • Improve Strategic Sourcing Discipline

    Procurement has been applying the seven-step strategic sourcing process for over 20 years, and doing so has led to billions in savings. But there is still room for improvement; download this white paper to learn more.

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