Re-branding Procurement

The endless debates about the role and status of Procurement are on one level quite tedious – they seem to drag on and on, with no definitive outcome beyond wide agreement that things must change.

Yet this is an important conversation because the activities undertaken by Procurement have a very real impact not only within organizations, but on society as a whole. For many reasons, that impact continues to grow so we must examine how to ensure it is beneficial and delivering positive outcomes. We need to give power to the voice of Procurement and that comes not from authority, but from knowledge and influence.

It seems to me that there is a relatively wide consensus that the Procurement role today is too narrow – it needs to operate with a far more holistic view and mission. So here is where I stand on this question.

Rebranding procurement as part of an integrated commercial function could potentially enhance its perceived value and the respect it receives within an organization. Executed with the right management support, this rebranding would help reframe the strategic importance of procurement and its role in driving business success beyond cost savings. Here are several reasons why this might be effective:

1. Strategic Alignment

In spite of some progress, in many organizations Procurement continues to be seen as a cost-center focused on purchasing and compliance. As part of an integrated commercial function, driving the trading relationships on which success depends, it becomes a strategic partner involved in value creation, market positioning, and competitive advantage. This alignment underscores the role of achieving broader business goals, not just operational efficiencies.

2. Enhanced Collaboration

Too often, Procurement may be perceived as working in isolation, primarily interacting with suppliers and internal stakeholders on a transactional basis and operating with a relatively narrow functional view. Integrating procurement into the commercial function promotes a more collaborative culture. It emphasizes the need for procurement activities to be closely aligned with marketing, sales, R&D, and other departments to support product development, market entry strategies, and customer satisfaction.

3. Broader Skill Recognition

The skills in procurement are often undervalued, seen as limited to negotiating and purchasing. This image problem also makes it much harder to attract and retain talent. Rebranding would assist in promoting and building diverse skills, such as a far more holistic view of supplier relationship management, risk management, behavioral economics, impact management and innovation facilitation. With greater respect come enhanced career development opportunities.

4. Value Proposition

As already stated (and still borne out by benchmarks), the value of procurement is often measured in terms of cost savings (especially negotiated savings) and compliance. The commercial rebranding allows a shift of measurements that would reflect its contribution to revenue growth, market expansion, and overall business strategy. It positions procurement as a component that is key to the commercial success of the company. By pulling it out of its silo, it gains access and insight to a much wider array of market insights, enabling its contribution to profitability and competitive advantage.

5. Cultural Shift

A big issue that has driven this debate is the fact that Procurement is mostly viewed as a back-office function with limited influence on strategic decisions. The proposed integration can initiate a cultural shift within the organization, where procurement is viewed as an essential, forward-thinking part of the business that contributes to strategic decision-making and innovation.

Conclusion

Let’s be very clear. Simply changing a name will not address core issues or perceptions; it must be part of a much broader shift. That is why organizational consolidation into a more holistic ‘commercial strategy and operations’ group sends a very different message and creates exciting opportunities to be at the heart of business success. Trading relationships and their coherent management are the foundation for any organization’s success. With today’s need for far more rapid, adaptive and informed decision-making, the case for change is overwhelming – and the time for constant debate is surely behind us.