Why the commercially astute procurement professional is critical to sustainability
Here’s how to spot them, and why they benefit businesses.
Nothing has really changed – commercial acumen is still the weapon of choice in the war against uncertainty. But let’s talk about that commercial acumen just for a moment. In this case, and in these times, commercial acumen is the difference between maintaining current processes, protocols and making sure every box has a tick in it, and sustainably growing profit and adding value.
In this Industry Trends article, we take a closer look at the commercially astute procurement professional and what they bring to the table to ensure that growth and value over the medium and long term is protected and optimised. In short, they create value – that’s how you’ll spot them.
Creating value is the key
Actually, this key separates us from the cliched, red tape-bound, process driven, cost savers that many people outside this critical business function see as the defining statement on procurement personnel. In some cases, and in some places, that might once have been true. But not today, where in order to maintain reputation, market share and profits, the value envelope must be pushed on a daily (OK maybe not daily but definitely quarterly) basis.
What does that mean? Well essentially it means two things:
1) Challenging the brief (as forward-thinking marketing teams might say) by not only understanding the required deliverables but then seeking to add value as opposed to solely decreasing costs.
2) Actively searching out opportunities to create value adds as part and parcel of your business-as-usual activities.
Instrumental to point one is a clear understanding of where value lays, in terms of procurement. It can be said that value is represented in:
1. reliable relationships where there is a clear exchange of benefits;
2. a reputation for reliable delivery that puts minds at ease; and
3. being easy to work with which extends into the realm of appropriate use of technology and simplification of process particularly from the client-side (internal and external) point of view.
Point two is slightly harder to define but easier to recognise in your commercially astute procurement professional or team. Here we are talking about workplace culture. This is about seeking out new opportunities while safeguarding established best practises as a matter of course, week in and week out, in service of both internal and external stakeholders. Let’s dig deeper into culture as we define the attributes of the commercially astute procurement professional.
Two tell-tale signs that you are dealing with a commercially astute procurement professional
OK, let’s get the “givens” out of the way early. It’s a given that a procurement professional or a procurement team will:
1. Focus on cost management
2. Share information as required
3. Utilise an appropriate suite of tools
4. Upskill and train as necessary
And here are just some attributes you’ll recognise in commercially astute procurement professionals.
1) Relational value adds on tap
It’s more than just a friendly voice on the phone and an occasional thoughtful card. One huge difference maker is pipeline management/moderation. Proactively creating better supplier relationships by working to avoid peaks and troughs in demands to better manage stock on hand wind points all round. This shows consideration, foresight and a nuanced understanding of truly sustainable business relationships, and hopefully a clear path towards preferred supplier/partner status.
2) Makes data work harder for the whole enterprise
Central to the commercially astute procurement professionals is the ability to understand the difference between risk mitigation and risk aversion. Risk mitigation understands that the procurement department’s role is twofold:
a. Solve problems – And it’s not just that problems get resolved but how they get solved. Understanding that sustainability hinges on mutual benefits, a professional that demonstrates that they understand both sides of the equation is not only sought after but valued.
b. Create opportunities with data – The issue with simply listing “data driven insights” as an attribute is that it doesn’t explain the opportunity or the result. Data driven insights are a means to an end. It was mentioned in a previous Industry Trends article that A.I. was a tremendous tool for corralling data because of its enormous capacity. But where to from there? The ability to leverage this data within the paradigm of market analysis en route to actionable outcomes that benefit the organisation, is a textbook example of added value. Conceivably, one could then anticipate the impact of market changes such as legislation, environmental impacts and price fluctuations in primary resources. A commercially astute professional turns market analysis activities into market engagement strategies that set the company on course for sustainable growth.
An honourable mention goes to legacy building
We’ve all said it at one stage or another, “a wise person once told me…”. These statements are a result of commercially astute professionals seeing value in passing on their strategic and operational experiences. They understand that contributing to the professional body of knowledge is key to galvanising our industry and cultivating a culture of intellectual curiosity and creating value. These professionals make it their business to seize on opportunities to ensure procurement remains a valuable asset to commercial entities and organisations.
Tell us about the attributes you find most valuable in commercially astute procurement professionals.
