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The top table beckons … perhaps

July 7, 2016

Tania Seary of Procurious is the latest in a long line to suggest Procurement should be ‘at the top table’. Her article, Headed for the C-Suite, wisely suggests that a pre-requisite is to demonstrate relevance to business objectives and to do this through ‘ a new focus on key performance indicators’.

There can be little doubt about the importance of procurement and supply management activities in today’s business. As external spend increases, so does dependence on the quality and performance of suppliers. Ms. Seary rightly points to the value this can generate in terms of productivity, overall costs and potential innovation. Therefore, her suggestion to focus on areas such as these and measure Procurement’s impact is essentially a sound approach.

However, it seems to me that the problem for Procurement is that it is still only executing on other people’s ideas and strategies. Ultimately, no one needs Procurement if there are no customers. So to establish true strategic relevance it must visibly contribute to (and perhaps lead) product or commercial innovation. That would mean identifying new suppliers, new technologies, unique services that truly generate competitive advantage or open new markets.

Experience suggests that ‘the top table’ is where ideas are created, not where execution occurs. Of course the C-suite is interested in operational performance – and it pays great attention when it goes wrong – but those who undertake these roles are trusty lieutenants, not generals.

 

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