How to add value for your stakeholders through your procurement process
Procurement is more than just the bottom line and getting good prices. Discover how you can add value for your stakeholders through your procurement process.
While it’s essential that your procurement department is getting a good price, the bottom line isn’t always everything.
Procurement teams often face challenges with stakeholder management and buy-in while reducing their organization's financial and reputational risk. These challenges make it difficult for the team to reach overall organizational goals and initiatives.
Aligning stakeholders with the organization’s objectives is crucial for procurement teams and their processes to become more valuable. Here are three ways procurement teams can add value for stakeholders through the procurement process:
- Drive innovation strategically through data and surveys
- Gather data-driven insights from efficient spend and contract management
- Build rapport with your stakeholders
1. Drive innovation strategically through data and surveys
To drive innovation, your procurement department needs buy-in from executive support (i.e., CPO, CFO, or CEO) and your organization's internal procurement stakeholders. Upscaling procurement starts by investing in people and technology because they are critical to a procurement organization's success. Doing so will make your procurement process, and the people involved more efficient and engaged.
Having quantitative data can keep your procurement process informed. It’s essential to do your research by collecting analytics and conducting surveys, which will help you identify trends to determine what your internal stakeholders care about. This stakeholder analysis is also a perfect opportunity to hear their ideas.
A great way to determine what your internal stakeholders think of your procurement process is to send out surveys. When designing your survey, we recommend you consider a few areas, such as how successful your procurement process is, how well implemented it is, and any difficulties it faces.
Here are a few sample questions that you could tailor for your organization to assess stakeholder engagement:
- What are the most crucial success factors for your organization’s key stakeholders? What are their key expectations and priorities?
- Why do your organization's stakeholders perform specific tasks in certain ways? What is the approach behind this?
- Are there any overlapping opportunities for collaboration and innovation? How could procurement better collaborate with project managers and stakeholders in future projects?
- What are some recommended best practices procurement should follow when implementing new solutions?
For example, Michelle Vita, Senior Director of Procurement for Datadog, and her team surveyed internal stakeholders to gain insight into what was and wasn’t working when engaging stakeholders in the organization’s procurement management process.
From the survey results, Datadog’s procurement team automated the legal review process through a Jira board, which reduced the human touchpoints needed to keep the contract process flowing. Ultimately, her procurement team learned they “needed to be more hands-on with certain things and less with others.”
Whether you’re collecting data or identifying SaaS trends, having avenues with your organization’s executives and key stakeholders will help keep your procurement process informed.
2. Gather data-driven insights through efficient spend and contract management
Contract management’s role is vital in every organization’s procurement cycle, but it’s evolved to understand every aspect of a contract’s lifecycle. Organizations can find and extract meaningful data-driven insights from contract management data to make informed decisions.
Data-driven insights include transaction data, third-party supplier data, and contract meta-data (e,g. renewal/expiry dates).
One way to ensure that your organization can get the most insights out of contracts is to centralize any information for future reference.
By creating a central repository, your procurement team can sort and search all contract information stored digitally. Your team can then use data-driven insights to empower your organization’s business decisions, such as negotiations, with real-time data that is readily available.
In addition, having a central repository of data ensures your stakeholders can see other stakeholders working on the same projects to streamline workflow and make informed decisions efficiently. It also creates widespread visibility into your project management system among your team and organization. As a result, having centrality helps reduce costs and makes your procurement process more efficient.
3. Build rapport with your stakeholders
Engaging with your stakeholders can be challenging, but it’s one of the most critical contributors to your organizational success. Interacting and communicating with crucial decision-making stakeholders helps your organization strategize its short and long-term goals.
While successfully interacting and communicating with your stakeholders helps build rapport, it doesn’t happen overnight. Over time, it will become easier as you consistently deliver results to your stakeholders. Here are a few areas to consider when building rapport with your stakeholders:
You should tailor how you approach your procurement stakeholders since they may work differently or follow different processes.
One optimal way to get the most value out of your stakeholders is to find and cultivate relationships with senior leadership as early as possible. These relationships can help secure buy-in and access to department meetings, which are perfect opportunities to ask what people need from procurement while keeping your procurement and strategic sourcing processes informed.
Understanding how to prioritize projects with your various stakeholders can allow you and your team of procurement professionals to focus your time where it matters the most.
A consistent cadence of communicating with your stakeholders is key to organizational success. It’s important to understand that there’s no “perfect” cadence for communication because your stakeholders may have different preferences on how often they should be updated.
An optimal way to keep everybody on the same page is to establish a communication plan between you, other procurement leaders, and your stakeholders. The plan should establish a communication channel, such as Slack, and how frequently you’ll update your stakeholders.
For instance, having a kickoff meeting at the beginning of an important project helps you and your stakeholders align on crucial details and secure buy-in on critical milestones. From there, having regular check-ins on these projects will help ensure consistent alignment and assure your stakeholders that your team is in control.
Your organization will be much more efficient in achieving its goals if you consistently communicate with your stakeholders, nurture relationships with them, and trust that they will make the right decisions.
How Vendr creates value for your stakeholders
Using Vendr provides value for your organization through real-time data and ensures strong relationships with various stakeholders while delivering the tools necessary to ensure project success.
For existing procurement teams, there is more involvement and opportunities for stakeholders to play an integral part in the process. If your organization is in its early stages, getting a headstart on effective stakeholder engagement is vital because you’ll reap value sooner rather than later. Engaging with your stakeholders should be strategic and help drive a competitive advantage that helps, not hinders, your team.