Procurement in 2020: To Heck With Organizational Alliance – Building True Linkage and Alliance

Alignment is overrated. Deloitte argues in Charting the course: Why procurement must transform itself by 2020 that “organizational alignment has become an overused phrase in describing traditional procurement transformation goals.”

I couldn’t agree more. Yet true alignment, in the form of real linkages and alliances with the business, will be key to sustainable success in the future of the function. As Deloitte suggests, “if we’re to succeed in the world
of procurement in 2020, true linkage and organizational alliances are imperative. These might take the form of joining finance and procurement with responsibility for metrics, numbers, controls and processes (including an extension of activity into accounts payable/invoicing, GRC, tax, treasury, etc.)”

Alliance and linkage will extend beyond procurement and finance collaboration. Consider, as Deloitte suggests how:

Future business linkages might also involve procurement having an embedded role in the brand management group within a CPG company taking the lead with marketable issues associated with supply chain traceability, supplier practices and global stewardship. For a company focused on B2B sales, linkage and alliance might take the shape of procurement working closely with account and sales organizations to help redefine the next generation
of products and service levels based not just on the capabilities of the company but on the broader supply chain.

One thing I’ve seen recently that backs this up –involving the family member of a colleague at Spend Matters – is procurement organizations “sourcing” new talent from the marketing/brand function of the business to create greater empathy with stakeholders by putting these embedded experts in charge of spend. They might be new to procurement, but that’s teachable. But what they have is the empathy of those on the frontline of the P&L – as well as the respect of strategic suppliers, such as agencies of record.

This post is based in part on content from Charting the course: Why procurement must transform itself by 2020. If you’re interested in learning more about how analysts see the future of procurement and supply chain, register for our upcoming conference, Commodity/PROcurement EDGE.


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