Aligning Procurement To The Corporate Strategy

Procurement is increasingly appreciated as an important part of corporate function and strategy. Companies entrust more decision making to Chief Procurement Officers, and departmental budgets seem to be on the rise. However, discrepancies often remain between the procurement department and the larger corporate strategy. This piece offers ideas that can help procurement officers align their strategy with the broader company vision.

Procurement And The Corporate Vision

Including procurement in the corporate vision is essential to an effective corporate strategy. This means that procurement goals must align with corporate goals and vice versa. Procurement executives should be on the lookout for efforts to update the overall corporate vision. These provide a unique opportunity for the procurement department to ensure that its mission is sufficiently tied into broader corporate goals.

Once the company and the department visions are clear, be sure to message the combined vision to your current and prospective suppliers. Procurement departments and suppliers can have rocky exchanges throughout their relationship, stemming from the gap between the two parties on expectations and assessments of what service is being provided.

If the procurement department applies the corporate vision to new exchanges, the suppliers may better understand the goods and services your department needs and why you need them. Further, your department can more easily determine which suppliers are not helping you meet your company’s standards. Discontinuing problematic relationships will make it easier to align your operations with the goals of corporate leadership.

Making In-House Adjustments

Internal changes can help expedite the process of matching procurement and broader corporate strategies. When your department makes new hires, be sure to educate them on the key values and goals for the larger corporation.

A useful strategy is showing examples of successes in aligning to the corporate vision through the lens of a procurement decision. This approach will allow new hires to work naturally towards the goals of the corporation. Out-of-department hires are good for the procurement and corporate strategies for a different reason. New out-of-house hires in important positions can often be molded when they join. Procurement officers can use this opportunity to teach the new employees of the preferences of their department, causing the hires to help align corporate strategy and department strategy.

Developing mid-year reports can help you hold yourself accountable in acclimating to the corporate vision. At the beginning of the year, the procurement department should set goals that are in line with the targets set by the full company. After working to those goals, a mid-year report allows you to gauge how much work is left to achieve the vision. If one area is behind the target at that time, reorient teams to focus more on the lag. Creating specific metrics will allow you also to showcase your leadership skills and improve performance against the metrics driven by the corporate vision.

Conclusion

Procurement often naturally aligns with the strategies of the corporate office. In the areas of your department that are behind, invest the necessary resources to bring your operations into line with the business as a whole. Your department will serve as a stronger complement to other areas of the business. And as a result, your procurement organization will likely see an enhanced role in the larger company.