The most effective procurement organizations are able to attract, stimulate and retain top talent; and retain the energy and momentum to continuously drive change to their companies. Less effective organizations can succumb to bureaucracy, marginalization and the loss of talent.
How your procurement organization approaches staffing can make all the difference. Here is an overview of the
Top 5 considerations for building and staffing your procurement team:
1. Focus on the 21st Century procurement leader. The traditional procurement focus on cost savings, negotiations and contract terms are all critical, but they have become non-differentiating table stakes for procurement leaders.
2. Don’t overstaff. Every procurement organization is resource constrained and has more work than it can possibly complete. However the strategy of bulking up with bodies results in more overhead and the perception of an organization peppered with administrators, compliance cops and transactional buyers, all of whom will be accused of slowing down business. Find ways to make other organizations accountable for lower value activities, and reposition a smaller procurement staff as managers of spending strategy, governance and relationship performance.
3. Build in flexibility. Create an environment that will ensure that the procurement staff is able to move across commodities and business areas. This means cross-training and balancing subject matter depth with adaptability and flexibility.
4. Manage customer intimacy. To the extent possible, co-locate your key personnel with their most important internal clients. Your clients should see procurement leaders as members of their teams. Build formal partnership agreements with key clients, and involve them in the evaluation process of your leaders.
5. Compensate well. A smaller team is easier to make a well-compensated team. If the core procurement organization is able to focus on the activities that will bring the largest bottom-line impact to the organization, and if budget is freed up through the strategies identified in consideration #2, it will be easier to attract top talent.
ISG’s seasoned sourcing experts can help you achieve your global sourcing goals through objective advice, robust market data, knowledge of your industry and extensive experience with sourcing negotiations.