1. Collaboration, teamwork, alignment
Gregg Barrett
KPMG recently hired the Economist Intelligence Unit to conduct research on the state of
procurement and the findings do not all add up to good news.
Supply Chain Digest‟s interprets it like this: “Barriers remain to procurement moving up on
the corporate ladder . . . [based on] disconnects in perceptions between procurement execs
and other company managers. Procurement-related staff think the biggest barrier to
procurement becoming more strategic is the lack of understanding or interest by other
functions in that evolution. Conversely, executives outside of procurement think the biggest
barrier is that procurement managers don‟t understand the business well.”
Although I don‟t think this comes as much of a revelation, it does reaffirm the fact that little
has been done to overcome this disconnect despite the procurement transformations so many
companies have gone through.
This suggests that better internal marketing, communication and change management needs
to be on the radar screen of procurement considering that “53% of non-procurement
executives agree with the statement that the procurement function is too focused on cost and
not enough on value. Another 40% say the same about the focus on policies versus
innovation.”
Procurement clearly has its work cut out.
If we dig a little deeper into the policy side, strategic sourcing has become entrenched as a
primary policy and process inside global procurement organisations for several years now.
However, when procurement is asked about the alignment mechanisms being used to align
sourcing strategies with enterprise strategies, the question is usually met by silence.
Why is there still a disconnect between sourcing strategies and enterprise strategies? The
answer offered usually relates to “strategy ownership”.
The procurement department usually owns the sourcing strategy while responsibility for
enterprise strategies usually resides with others. Unfortunately, these two functions are often
disconnected from each other and the chasm results in neither strategy being optimally
realised.
Jim Bergman from the IACCM recently highlighted two examples that underscore this point.
“We recently witnessed a large technology firm develop and roll out a „green strategy‟ related
to its procurement function. This strategy included asking the supply base to commit to
„green products‟ that the suppliers would sell to the firm.”

2. As the supply base was introduced to the new policy and strategy, a few suppliers questioned
the firm about why it had no overall corporate “green strategy” regarding the products and
replacement parts it was marketing and selling.
“Failure to be consistent in strategy between the procurement, business development and
sales functions led to diminished credibility and reputation with the supply chain. While
difficult to measure, the costs associated with this inconsistency were noticeable.
“Second, a large equipment manufacturer decided to focus on achieving a key financial ratio
as a corporate metric. The strategy was laid out by the corporate strategy development group
and procurement was involved early in the strategy development process to ensure the target
was realistic.
“Procurement was subsequently engaged throughout the process and became a strong
advocate of the strategy. Certain measures and mechanisms were woven into the sourcing
agreements developed, including KPI‟s, and proactively managed by procurement.
“The key financial ratio targets were hit. The company‟s stock price rose and its market
capitalisation increased.”
The differentiating factor in these two examples lie in the ownership of the strategy.
With the technology company, there was no joint ownership of the strategies. With the
equipment manufacturer, there was joint ownership of the strategy and an alignment between
the sourcing/contracting strategies and the broader enterprise strategies. This occurred by
building a collaborative climate which was an essential precursor to the effective
implementation of the strategy and attainment of the key financial ratio. Building this
collaborative climate is critical and takes teamwork.
Tim Cummins, chief executive of the IACCM, recently noted that “a lack of trust inevitably
leads to exclusive, rather than inclusive, behaviour. Groups like procurement, legal and
commercial/contract management are frequent victims of exclusion or seek to exclude
themselves believing they are in some way „special‟ or „too busy‟ to be part of the core team.
As a result, „We were involved too late‟ is a frequent cry or „We could have warned them
about that if only management had included us.‟
This point was emphasised recently by Tammy Erickson in a Harvard Business Review blog.
She said: “Increase your firms „collaborative capacity‟ by building relationships and
encouraging knowledge exchange . . . Find ways to help your organisation become more
spontaneous, innovative and reflexive. Pass the ball.”
Tim notes that “the development of powerful teaming instincts and methods will increasingly
be a key competitive advantage bringing speed, quality and agility to business operations. It
is an area in which we can bring leadership (for example, in designing negotiation or post-
award contract management methods) but whether as leaders or participants, the critical issue
is that we must exhibit collaborative behaviours. Enjoy and contribute to all that is special
about being in a team. In other words, recognise that teamwork is not a threat to our power or
authority – it is, in fact, a prerequisite – and in addition to that it can be fun.”

3. As procurement professionals strive for the development of technical skills such as
negotiation, contract development, RFx development and supply chain design, less emphasis
is being placed on developing “soft skills” and non-technical skills.
When given a choice of training on the topics of change management, communication or
strategic sourcing, many procurement professionals opt for the latter. But, why limit yourself
to one of these options? It‟s time to start focusing on the soft skills.
) Special thanks to Jim Bergman and Tim Cummins from the IACCM