M y initial reaction when I read this was, “Are we even asking the right question? Is the actual goal to increase spend under management?” Drawing on lessons learned in a separate session with Stephen Shapiro, true innovation requires us to get very specific with this question.
“What does it take for an organization to consistently increase their spend under management? How can they continue to deliver savings?” This was the problem statement for the roundtable discussion I hosted at SIGs Global Thought Leadership Summit.
So, we then decided to reframe the problem statement to “What does it take for an organization to sustain or increase the level of value they provide?” The difference between the two statements is that as a sourcing or procurement group achieves goals such as, cost savings or control, those goals convert from a value-added win to new levels of expectation.
Below is some practical, yet impactful, advice that answers the above problem statement brought directly from SIG’s executive delegates to you.
Understand the needs of your business constituents
Become integrated with their team so that you can truly know how they operate, how they work, and what they need. Learn their language and speak in context of that language, not in sourcing-speak. Share data about how they are sourcing and where you can help. Grow or hire strategists who understand how a given business unit operates.
Solve the big ugly
Be willing to take on anything in order to help a business unit deal with a problem supplier or help them solve a really hairy issue, all without you getting credit for it. When you proactively offer your services and build a hero (and an advocate) within the business unit, overtime you will earn credibility and respect.
Relentless pressure, gently applied
Approach the hard-to-influence business units (like legal, marketing, audit, consultancy) with persistence, not aggression. Consistently and firmly remind them of opportunities they may be losing by not engaging sourcing, all while maintaining a supportive perspective.
Success breeds success
Demonstrate what works. When you back up your successful actions with data, it is hard to deny the value.