What can businesses do to make it easier for those responsible for indirect procurement to manage organisational transformation too?
“Every survey we’ve done has shown a massive increase in how procurement is valued and how procurement is treated within organisations,” said Helen Alder, Head of Learning and Development at the Chartered Institute of Procurement and Supply (CIPS), during a roundtable discussion featuring senior indirect procurement professionals held at RS Group headquarters in London.
“Recognition and value are going up, but I think the more important question is do those working in procurement feel they have someone that’s listening to them? Do they have the ability to influence?”
Roundtable participants returned to these questions repeatedly during the event. They provide the starting point for this article too. This is the second in a series reflecting on this event and exploring key concerns for those responsible for Maintenance, Repair and Operations (MRO): how best to manage demand, navigate change and mitigate risk.
Like the roundtable itself, these articles are also informed by the results of a survey of indirect procurement professionals conducted by RS and the Chartered Institute for Procurement and Supply (CIPS) and the 2022 Indirect Procurement Report, Taking control as the pressure rises, which offers analysis of the survey’s findings.
According to the report, those working in procurement believe they have a significant role to play in change and transformation practices, second only to operations (82% to 77%). Furthermore, 60% felt confident about their ability to influence change within their organisation.
That said, there was recognition that implementing change isn’t always easy, with 43% of those surveyed viewing it as quite or very difficult. One of the factors that makes instigating and managing change more difficult is the number of stakeholders involved. The survey put the average number at seven – and each one can have a different level of receptiveness to change. “Change management is one of the hardest things you can do in business,” observed a procurement leader, “because it’s about winning hearts and minds.
“You’re going to end up challenging those people that have done it this way for 20 years and think there’s nothing wrong with it, it works, why are you changing it?”
Here are six ways that organisations can increase the influence of indirect procurement professionals to make it easier for them to implement change and transformation practices.
1. Support and value the procurement team
“Do you think the procurement agenda is on the radar of your organisations enough?” asked Simon Fletcher, Director of UK Sales at RS, during the roundtable. “Do you feel you’re getting support?”
Responses were mixed but largely positive. “It’s grown in importance in the eyes of the business,” said one global category manager. “Cost reduction, efficiencies and value used to be a very procurement conversation. Now it feels like a business conversation and certainly in our demand planning process for 2023 it’s the first time I’ve felt pulled by the business instead of procurement pushing.”
“I think procurement as a function and as an offering to the business is still on a journey,” answered another participant, a procurement leader working in the defence industry. “The business continuity, planning and AI conversation is really important. We have to be the enabling party to help the rest of our business make good decisions within limits and at various levels of complexity.”
“Having senior leadership who already value and support the procurement team matters enormously when it comes to managing change”
Having senior leadership who already value and support the procurement team matters enormously when it comes to managing change. As one discussion participant put it, “There’s a lot of influencing and ease of implementation can be dramatically increased when it’s got senior sponsorship with the company.
“If it’s on the radar of someone’s who’s very senior then it makes life a lot easier. If it’s not and you have to influence people about something that’s not key to them, change can be a lot more difficult.”
2. Invest in change management development
“Organisations need to invest in change management development,” stated Emma Botfield, Managing Director for the UK & Ireland at RS, during the roundtable discussion. This is often lacking at present. “It’s not overtly out there,” said one participant. “You get the direction change and then it becomes a deliverable. Go away and do it.”
3. Involve procurement from the start
Consulting with those responsible for MRO early on in transformation planning would help too.
“Procurement needs to be involved at the outset,” argued one MRO procurement professional from the energy sector. “Procurement often gets left out and only comes into the conversation further down the line when decisions have already been made. That’s a big issue.”
4. Reduce the frequency of change
Reducing how often organisations go through a transformation process would also be welcome. “I’ve been in procurement for 20 years and I’ve never seen anything like what we’ve been through,” shared one participant. “It’s been one thing after another.”
A colleague from the energy industry agreed: “The report described recent market conditions a series of perfect storms. You throw a reorganisation on top of that and it’s been incredibly difficult.”
The same participant acknowledged the value of internal change but called for greater attention to the effect that the wider business context might have. “A reorganisation can enable change because you move people around and potentially bring fresh perspectives into areas of the business that have been stagnant,” they said, “but with the state of the broader market at the moment and with procurement going through turbulent times, it’s made making changes very difficult.”
5. Be willing to learn quickly
Roundtable participants highlighted the need for a cultural shift in how organisations understand change and respond once it’s been introduced. “There’s a cultural piece,” said a global category manager for MRO. “We had a top IT business in for just over a year to support our agile transformation and it was all great, but we just tried to work in a very traditional way using these new tools.
“We need to adopt an agile mindset,” they contended. “Instead of networking an idea with all your stakeholders and getting every vice president in the business to sign off the decision, how about you empower a team to go and try it?
“If it doesn’t work, you celebrate your failure, take your learnings from it and try something else. It’s a different mindset and culture of change.”
6. Get support from your suppliers
Finally, working with trusted suppliers can make introducing changes, or even making a business case for transformation, easier. “Organisations can be concerned about whether a change will actually deliver what they say it will,” acknowledged Fletcher, “Sometimes it is difficult to demonstrate the value add.
“The onus is on suppliers to give organisations confidence either savings or efficiencies are gained.”Simon Fletcher, UK Sales Director, RS
“So, the onus is on suppliers,” he continued, “people like us, to provide the information that gives you the confidence that you will make the savings or gain the efficiencies.”
For more insights from experienced indirect procurement professionals on the challenges of MRO today, see the final article in this series, “The impact of risk on approaches to indirect procurement”