We’re continuing our foray into the top barriers to success that we outlined in our top barriers post that chronicles the barriers that keep coming up over and over again in every Procurement survey in our effort to ensure that you don’t have to read another state of procurement study for the next 5 years. Finally, we have to deal with the Resistance!

A Brief History …

As per our discussion of the Organizational and/or Technical Execution Support Capability barrier, and the siloed ways of working barrier, with each successive innovation, business, and process improvement, processes and tasks became more complex and required more education and experience to perform. As a result, with each successive innovation, each department became more and more narrowly focused on their functions, and, correspondingly, educational programs became more and more focused, the employees of each department learned less and less about the other functions, tasks, and requirements outside of their domain.

Simultaneously, as organizational departments diverged further and further apart as their processes, equipment, software, and budgetary needs became more and more distinct, the share of the pie each received decreased. The departments were stretched thinner and thinner, and their ability to adequately function was often at risk as much as that of Procurement and Supply Chain.

The Problem

As a result, stretched thin and without a deep understanding of Procurement operations, most departments have little incentive or capability to properly support Procurement.

The Necessary Realization

“You scratch my back and I’ll scratch yours, first.”

You have to demonstrate how you can make their jobs easier and get better results. They won’t learn Procurement because, until they understand why it exists and what value it can deliver, they don’t even want to give you the time of day.

This means that you will have to learn their functions, understand their major pain points, and which of Procurement’s capabilities and values to promote to that department.

For example, Marketing doesn’t care about saving money — if they have the budget, they have the budget — because their metric is eyeballs and engagement and inbound uptick, and that requires creativity — and the best creatives cost the most, so, dear Procurement, please go away. It’s up to Procurement to understand that and explain to Marketing that they’d have more money for creative if they broke the quotes down into creative and non-creative expenses, and understood the market rates for standard services and consumables and only paid market rates, not ridiculous mark-ups as part of bundled quotes. It’s up to Procurement to explain to Marketing that 200 GSM C2S sheer finish paper is 200 GSM C2S sheer finish paper. Recording equipment is very comparable as well. There are average labour rates for recording engineers, camera people, etc. And that they can save Marketing money where talent doesn’t count so that Marketing can hire better talent or do more campaigns.

This also goes for Legal, R&D, Manufacturing, HR, and every other department that needs to procure goods and services. Legal will need help with understanding not only standard rates for standard services but how matter costs break down. HR will need to understand average rates for consultants in IT, Utilities, etc. where there are average rates. R&D will need to understand which suppliers can produce similar custom parts with better assurance of supply (and Procurement can steer to the subset that are more cost competitive). Etc.

The Technological Requirements

The technological requirements are considerable and require supply chain aware sourcing and sourcing aware supply chain and expertise from source to sink and back again on both sides.^*

This concludes our initial series on the top Procurement barriers that keep getting repeated in every survey, and now you don’t need to read another survey on procurement barriers for at least five years! After a short break, we’ll be back with the major procurement risks!

^*A final reminder that if you want guidance in the short term, hope that your favourite provider reaches out to Bob Ferrari of Supply Chain Matters or the doctor and enables us to focus on writing the series (or in-depth e-book) explaining what modern Procurement and Supply Chain Tech needs to look like (and how it needs to be implemented) to address the challenges, reduce the risks, and address the priorities versus just dripping out tidbits as free time permits.