A few weeks back, I spoke at the Zycus customer conference in New Orleans. The topic of my presentation was: Procurement Today and Tomorrow: From Fire Drill to Fire Starter -- Transformative Scenarios For Change. The unofficial gist of my talk was that procurement had essentially become finance's poodle in too many companies, and must transform itself from lap dog to attack dog. Or as I put it during the introduction, our read of current "finance and procurement" collaboration reminds us of what one member of the press affectionately called PM Tony Blair in relation to President Bush (hint: finance is not the dog).
At best, I noted that procurement has convinced itself into thinking it has become entirely strategic. And it's even done a bit of marketing around the topic to feel good about things. But at worst, procurement has taken its eye off the original purchasing ball – maintaining stock, not rocking the boat, and getting suppliers paid. Without doing these basics, I observed, we're dead as a function longer-term (aside from waiting for the CFO to take us out on leash to do our thing).
Of course a procurement leader can denude himself into thinking he's at the same level as the head of sales, HR or IT. But we need to not mince words here. If procurement has truly become more strategic, why can't it build business cases and get funding for step-change levels of staff and technology investment more easily (e.g., doubling headcount)? Why does finance (and the board) often not believe our savings numbers? And why do salary deltas still exist within procurement management ranks and sales/commercial organizations?
The evidence is clear, at least to me, in far too many underperforming organizations. Procurement has drunk its own Kool-Aid, and in doing so, has given ourselves the equivalent of organizational cavities that are rotting away at the very savings and risk avoidance core of what we're supposed to do. Yet there are initiatives we can undertake to change this. In the next installment of this series, I'll share the top five initiatives from my Zycus chat to get out of the lap dog mentality and show our teeth.