SIG University Certified Sourcing Professional (CSP) program graduate Nancy Wieskus shares the "Better Method" for procurement teams to implement into their procurement system.
The hybrid procurement method combines a central procurement base with subject matter experts (SMEs) already in each department to balance stakeholders' functionalities and strategic sourcing, which gives the business the best of both worlds.
Centralized purchasing or Procurement is a system in which one department manages the purchasing of goods and services for the entire organization. The purchasing department is usually located in the organization's headquarters, where it operates the purchasing for all the branches in the firm. Advantages of central purchasing include reducing redundant work, lowering costs associated with training and supporting additional staff, and better controls. Disadvantages may be that the category manager may not be a subject matter expert in the particular category. It may take longer to complete a contract as Procurement takes a strategic approach. Also, stakeholders may be resentful in introducing other vendors into the mix.
Decentralized Procurement, on the other hand, allows individual stakeholders to make purchases for their departments. This, too, can have its advantages. Decentralization brings the decision-making process closer to the scene of action. This leads to quicker decision-making at the lower level since decisions do not have to be referred up through the hierarchy. Disadvantages are lower cost savings, competitive edge, reduced workload, and strategic advantage.
Nancy Wieskus, Lead Category Manager, Valley. Bank
At the heart of that urgency is assessing and then mobilizing your procurement team’s digital capabilities throughout the extended organization.
How do you mobilize your procurement team’s digital capabilities?
With this third article from the 2022 SIG Procurement Technology Summit Keynote Series, I will share with you the "key insights" from Chris Kee (VP, Sourcing and Procurement at Northwestern Mutual) and Colin Frazier (VP – Solutions at ZIP) keynote on creating the right digital experience.
To better understand what creating the right digital experience around your team's procurement process involves, you must first understand your organization’s procurement workflow.
What Is The “Procurement Workflow?”
When asked, "what does the term procurement workflow really mean to you,” Northwestern’s Kee indicated that it does more than encompass the process for supplier onboarding. Kee believes the workflow process involves all critical end-to-end touchpoints, including reviews and signoffs. It also provides total stakeholder transparency to address company risk and privacy, legal, and data security requirements.
Furthermore, procurement professionals can't only be involved in the transactional process, which has traditionally been the case. Beyond managing the process from start to finish, procurement professionals also need to be capturing stakeholder engagement feedback to best manage the supplier relationship post-contract.
SIG University Certified Sourcing Professional (CSP) program graduate Diana Redwine shares her thoughts on the best way to get business stakeholders engaged.
Ugh, here comes procurement, getting in our way again!
In the Tech world, the role of procurement changes with the transition from start-up to a public company. That transition is full of bumps if not addressed with a support mindset.
Somewhere in the timeframe from growth to a public company, experienced procurement talent is engaged to help move spend activities from tactical to strategic. The notion of this is much more grand and idealistic than the reality.
Traditionally, handling contracts, licenses, order forms, etc., have been managed by the person with the need, not necessarily by someone with expertise in contract development and negotiation. With procurement added to their toolkit, the business stakeholders might say, “gosh, it would be nice to hand this off to someone else” or “how do I know this is the best price/terms?”
More likely, they have been advised that a new policy is being implemented that requires procurement involvement. However, in my experience, many stakeholders view procurement as an impediment to progress and do not willingly hand off their contract needs. Hence the need to truly consider this question of just what the stakeholders REALLY need to know about category management.
Diana Redwine, Senior Procurement Manager, Smartsheet Inc.
SIG University Certified Sourcing Professional (CSP) program graduate William DeMarzo shares his perspective on the old sourcing cliché “don’t leave money on the table."
In our SIG University CSP course, we learned the benefits of “leaving money on the table” as this negotiation style builds trust, transparency, and a collaborative relationship with suppliers. Yet, the concept of leaving money on the table seems to be taboo in today’s business environment. Nine of the top ten hits from a Google search of the phrase are articles about why it’s a bad idea, a sign of weakness, or otherwise poor choice to do so. Perhaps this is more a sign of a zero-sum society than a negotiating strategy, but that’s a topic for another essay.
Let’s be clear that there are many business transactions where it is appropriate to pay the lowest price for a product or service. For example, products that have defined specifications, from a #2 pencil to a powerful server, or a service that has a measurable deliverable, should be sourced at the lowest price in the market. But when is leaving money on the table a good strategy?
William J. DeMarzo, Sr. Director, The Bank of New York Mellon
SIG University Certified Sourcing Professional (CSP) program graduate Candace Masuda, outlines how soft skills evolve procurement professionals into successful stakeholder managers.
As procurement professionals, we are required to wear many hats. We are consultants, analysts, problem solvers and project managers. All these qualities are necessary but not as crucial as having internal personal/soft skills. Interpersonal skills are the key to success in leading teams, negotiating and maintaining great relationships with our internal and external customers.
Several years ago, I was fortunate to attend a management training class. Something really resonated with me in that class about leadership and styles. There was a survey that reached out to several Fortune 500 companies. The goal of the study was to determine the most favored management style amongst their employees.
What Makes a Leader
Employees were asked to think of their favorite manager, past or present. What were the skills this person exhibited which made them great to work with? The survey results were interesting. The typical characteristics were technical, analytical and on-the-job experience. However, though these skills were at the top of the list, they were not the most significant. The most valuable skill was the manager that had strong people skills. The employees worked harder, enjoyed their job and were highly motivated.
Candace Masuda, Procurement Specialist, American Honda Motor Co.
SIG University Certified Sourcing Professional (CSP) program graduate Anirudh Sundareshwar outlines howmanaging stakeholders is well-served via effective communication.
A generic definition of stakeholder management is “Stakeholder management involves taking into consideration the different interests and values stakeholders have and addressing them during the duration of the project to ensure that all stakeholders are happy at the end.” It is important to understand that this may not always be true, especially in projects where multiple stakeholders and personal stakes are involved.
However, it is essential to ensure that most stakeholders are happy with the project's end result or initiative you are working on. That is not accomplished only by the end result but builds up along the project's lifespan.
As we have learned, one of the most critical tenets of stakeholder management is communication. It is vital to know what to communicate to whom, when to communicate and how to communicate, especially to senior stakeholders. This is an art and not easily achievable. Even more so in the current scenario where most people work remotely and do not have the advantage of picking up cues (verbal/non-verbal) as you would have in the pre-COVID era. Stakeholder management in our world involves both internal and external stakeholders, of course.
Anirudh Sundareshwar, Director & Head of Sourcing, BNY Mellon