2017 Global SRM Research Report - Solving the value Puzzle

ARTICLE 03/05

ARTICLE 02/05

What does it mean to be entrepreneurial? Entrepreneurs do not only work for start-ups. They can also work in procurement, linking supplier innovation to strategic business goals. But only if businesses optimise supplier relationships.

What resources will support procurement entrepreneurs?

Entrepreneurs will need support. Tools, skills and fellow professionals will be vital in creating opportunity from supply-side markets. It will require a subtle re-examination of procurement teams and the roles within them.

Entrepreneurs need to understand sources of funding and resources to get projects off the ground quickly. They need a set of governance rules that help launch projects at short notice without undue risk. It means being prepared to fail fast, learn quickly and move on to success. Above all entrepreneurship is about procurement thinking outside of its traditional remit. It needs to knock on doors and connect with leaders of marketing, finance, product development, IT and HR to understand the existential challenges facing the business. Procurement leaders need to ask themselves which long-term issues most concern the CEO and how can they bring their understanding of the supply economy to bear on solving these problems. It might end with finding a supplier and signing a contract. But equally it could result in a joint venture, amerger or partnership. That said, the day job has not ended. Procurement will still be expected to achieve incremental benefits in pricing, efficiency and value. But to expand into entrepreneurship, it will need new tools and skills, which we examine next. 

Finding suppliers, cutting deals and managing risk and performance: we seemany procurement professionals innovating in these areas, but that does not make thementrepreneurs. It is not about improving the way procurement works; it’s about expanding procurement’s horizons. Understanding the changing customer expectations and competitivemarket, procurement can look to serve the business by finding new opportunities for growth. They might not be on the narrow path that runs fromRFP to contract. Instead, procurement might ask, would it work for us if we bought this supplier? Would that supplier enter a partnership in which we jointly engage customers with a new service? Procurement needs to remove its blinkers to see what additional opportunities it can offer the business. But to work in a newway will require new habits. Procurement needs to understand where opportunities for growthmight lie for the whole business. It means building networks of like-minded entrepreneurs – inside the business with key stakeholders and outside the business with suppliers and customers.

Procurement as we know it is analytical in understanding supply markets, shaping tenders and contracts and negotiating deals. Although these skills will remain vital to procurement, the function needs to adopt new skills, attitudes and technologies if it is to become entrepreneurial. The newworld of procurement will rely more heavily on creative thinking, passion for finding new solutions and the ability tomeet and sell to new stakeholders. Teams leading in these developments will look to adapt their mix of skills and personality traits to become more extrovert. They will need people able to spot opportunities and think outside the established procurement paradigm. Entrepreneurial procurement may need to react at speed, but not without evidence or awareness of risk. As well as the right skills and traits, it will need the governance models and data to ensure newways of working are well informed. Leaders in the field will build a platform for entrepreneurs based on sound data accessible to all stakeholders. They will have networks of the best suppliers in place for the right projects. They will have templates for business projects ready, with the appropriate measure of business value in place. 

STATEOFFLUX 2017GLOBAL SRMRESEARCHREPORT