How Procurement Can Drive Value Through Partnerships with Other Departments
Procurement leaders can find it challenging to navigate the complexities of their organizations when attempting to implement changes in the department. It takes more than just day-to-day transactions to deliver business value and make lasting change—it requires collaboration.
If a procurement team is still siloed with limited resources and connections outside of the procurement department, they need to build strong partnerships between departments to realize their goals. By understanding each department's needs and roles within the organization, collaboration can become easier.
In this post, we explore how procurement leaders can drive success through partnerships with other departments.
Remove Barriers Between Procurement Functions and the Organization
According to Future of Sourcing, traditional procurement departments operated in a decentralized way, focusing on short-term initiatives instead of holistic ones: "Organizations that still exemplify these silos face challenges when it comes to thinking holistically and managing risks from all angles. Driving collaboration and strategic initiatives between departments is a critical way to begin to eliminate these silos, while still managing a daily workload of financial responsibilities."
One key strategy for breaking down these silos involves driving collaboration and strategic initiatives between departments. This requires a shift away from traditional procurement practices, which tend to focus on savings, and towards a more holistic approach that considers the organization's overall goals and risks.
By working closely with other departments, procurement leaders can gain a deeper understanding of their needs and priorities and collaboratively identify areas where procurement can add value. This might involve developing joint initiatives to streamline procurement processes, introducing new technologies or tools, or leveraging the expertise of external suppliers to meet shared objectives.
Importantly, this process of breaking down barriers cannot happen overnight. It requires a concerted effort over time, as procurement leaders build trust and credibility across the organization. This might involve investing in cross-functional training and development programs, promoting open communication and transparency, and actively seeking out opportunities to collaborate with other teams.
Assign Leadership Roles that Connect Departments
To successfully break down silos and promote collaboration between departments, it's crucial to assign leadership roles that connect teams. This helps ensure that joint initiatives have clear ownership and accountability, as well as a vested interest in success.
Leadership roles can be assigned in a variety of ways, depending on the goals and scope of the initiative. In some cases, a project manager from one department may be tasked with leading a cross-functional team, while in others, a steering committee made up of representatives from multiple departments may be responsible for overseeing progress.
Regardless of the specific approach, leaders need to have a deep understanding of the goals and objectives of the initiative, as well as the roles and responsibilities of all participating departments. This requires ongoing communication and collaboration, as well as a willingness to continuously iterate and adjust plans based on feedback and new information.
Assigning ownership of joint initiatives can also help build relationships and trust between departments. By working together towards a shared goal, team members can become more invested in each other's success and develop a deeper appreciation for the unique strengths and challenges of their colleagues.
Compile All Organizational Data into a Single Dataset
Procurement leaders and joint-leadership groups must also have access to a comprehensive dataset that captures all organizational spending data. This involves gathering and synthesizing information from multiple sources, including contracts and agreements, supplier invoices, purchase orders, and any relevant financial or regulatory documents.
Having a single source of truth helps procurement leaders and other team members to better understand the organization's overall financial health, identify areas of potential risk or wasteful spending, and develop strategies for improvement. It also gives decision-makers a clearer picture of how their own goals fit into larger organizational objectives, as well as the potential impact of any proposed changes or initiatives.
Learn More at ProcureCon Indirect East
Breaking down siloes and achieving more streamlined collaboration between departments will be critical to the future of procurement transformation. Many procurement leaders are already engaged in this process, and they’ll be speaking on it at the next ProcureCon event.
To learn more about how you can improve collaboration between your departments, don’t miss ProcureCon Indirect East, happening from September 11th through 13th at the JW Marriott Orlando Bonnet Creek Resort & Spa. Download the agenda and register today.