Valuemanagement brings Procurement to the next level

Finally it seems to happen. After many years of hard training to get a starting position in the team to no avail, the tables are turned for Procurement. The new coach has another vision, a wind of change is blowing and suddenly your specific competences are essential to be successful in a new league. This is the moment you have to do it, so take care you are ready to show it every day. The horse you’ve been flogging gets alive.
Corona has given the attention of organizations to 2 important trends a boost. Firstly the accelleration of acceptance of technological developments, which generates an unknown dynamic in successful businessmodels. Furthermore the rough edges of the neoliberalism and the one-dimensional attention to shareholder value have been blown up in our face. This ensures a broader view on stakeholder value and more focus on the human dimension.
Because of these intensive trends, the determination of the value an organization creates for her customers has ended up in a rollercoaster. Exciting because creating value is the essence of every organization, so all hands to the pump. This raises the question if “traditional” organizations” will still be the winners of tomorrow. Modern organizations, which are human-centered, agile, have focus on multiple stakeholders and consider cooperation as the way to create value, have a better chance.
So Value creation that is profitable in the matrix of developments becomes more complex. This complexity cries out for cooperation and inclusivity. Both internal and external, to define and realize the required value for the multiple stakeholders. As a professional, department or organization you won’t manage this on your own. This is where the big challenge comes for many organizations. A little reductive, but many “traditional” organizations are focussed on profit and organized top-down in functional silos. Not the ideal situation to receive all the signals and realise ultimate agility.
Fortunately “traditional” Anglo-Saxon organizations find their counterpart in organizations which adapted the Rhineland culture in which the human dimension leads to cooperation and agility resulting in multidimensional value development.
De trend of cooperation to develop value opens doors for Procurement. In “traditional” organizations Procurement operates often in a silo, directed top-down by the business. It’s very hard to climb out the silo and from the perspective of client value, cooperate horizontal with all disciplines within the organization. This while suppliers on average determine more than 60% of the client value. When value will be adopted and realized bottom-up and in cooperation with other disciplines and external stakeholders, there is a huge space for Procurement to play a key role in optimizing this value. Modern leadership that exceeds the Procurement silo is essential to be successful in this.
Procurement has struggled for decades with their position of limited connection with the business. It’s becoming obvious that within “traditional” Anglo-Saxon organizations realizing connection with the business is swimming against the current. The result is an introvert discipline that made the best of it. Now that Procurement has the wind in the back, Procurement has to develop in unchartered territory where requirements are different. It’s high time to go ahead to be ready to take the new role in the interest of Procurement professionals, but above all-in the interest of organizations that have to navigate in today’s stormy seas
Changing is always difficult until the knife is at your throat. Now that the genie of cooperation and connecting is out of the bottle, the cards will be reshuffled anew, in which the added value of Procurement will get a new dimension.
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Leadership in Procurement