Identifying suppliers and gathering good information on them is critical to successful procurement. What if there was a better way to do it?
When I received an email from Procurious asking me to share my Big Idea, I was thrilled but wasn’t quite sure where to start. There are so many! Launching my own company, tealbook, is a big idea in itself.
Providing companies with their own trusted, collective supplier intelligence is changing the way procurement and sourcing access and share supplier information. That’s BIG! Spending time focusing on the front-end challenges that come with the cost of time spent identifying suppliers, is changing the paradigm, and accelerating the process all together.
So I tried to think about where we see the most pupils dilate when we talk about identifying suppliers and supplier information. Where do I see the most head nods from more progressive procurement thinkers? As a result, I chose to focus my BIG idea on two important questions:
1. What if we shifted the focus from reducing the number of suppliers to ensuring that teams have the right suppliers?
2. What would happen if procurement empowered their internal stakeholders by making supplier intelligence a two-way stream?
The above are paradigm shifts from procurement’s ‘olden days’. They support new, progressive procurement, and sourcing professionals who are focused on having positive top line impact in their organisation.
Focusing on the Best Suppliers
For many years, we have heard about the need to centralise and reduce the supplier base. I agree that several suppliers with similar products or services can be bundled. Healthy competition is good but there is also an opportunity to leverage economies of scale.
But when it comes to teams that require unique partners or innovative solutions, reducing the supplier base can have significant impact on productivity and meeting goals. Without an intuitive procurement process, internal stakeholders will tend to do their own due diligence, and either have limited involvement with, or completely avoid procurement, altogether.
They will find ways to engage suppliers even though the process is complex, inefficient, and time consuming because it is critical to their business. Providing a faster and better way to access and identify the right suppliers can be indispensable to these business functions.
Ensuring that these teams have access to the very best suppliers – the ones that can provide the most value – will enable these teams to achieve their goals without roadblocks (whether real or perceived) set by procurement.
In order to keep up with these internal stakeholders’ requirements, there is a need for procurement to turn to trusted sources of supplier intelligence, in order to speed up the process of identifying suppliers. If this can be accomplished, I believe that procurement will have the ability to increase their internal credibility as business partners, and keep up with their fast-paced internal teams. With increased speed and visibility, the number of suppliers won’t matter nearly as much as the ROI.
Increasing Two-Way Supplier Intelligence
I often ask procurement who in their company can access supplier information, and how experience is shared between procurement and internal stakeholders? The response is usually just a smile. For most, it means they simply don’t share – or at least they could do a much better job.
Meanwhile, in a recent ProcureCon survey, over 70 per cent of procurement professionals responded that the most trusted supplier recommendations come from internal peers and business partners.
Internal stakeholders have direct experience with many suppliers from their current and past companies. However, their supplier experience usually sits in their head, or in a pile of business cards stuffed in a drawer. Procurement has very little ability to capitalise on this wealth of intelligence outside of hallway conversation and email exchanges.
Worse, there is very little legacy, which inevitably forces procurement to go back to the well for each new supplier requirement. With new and smart technologies, there is a way to capture this incredible knowledge by allowing internal stakeholders to:
- Share their supplier connections and experience internally.
- Allow them to access company-wide supplier intel that can help them better understand supplier relationships and get more visibility into their available supplier base.
Building a Supplier Network
When I talk to procurement about making the tealbook app available to internal stakeholders, I often see an eye twitch. The thought of allowing internal stakeholders to build their own supplier network and add their own intelligence to their company’s supplier base is a thought provoking idea for many.
Of course, I am sensitive to the fact that not all procurement teams will be comfortable with this idea, and so tealbook can also be used just within procurement. But, my BIG idea and hope is that by starting to build their own tealbook and sharing valuable intelligence among their team, procurement will:
- Significantly reduce the time spent searching for and identifying suppliers.
- Spend less time on tactical initiatives and have the ability to be more strategic.
- Support more initiatives and business requirements.
- Bring immediate value to their internal stakeholders and build stronger internal partnerships.
By opening these lines of communication, procurement stands to gain invaluable insights and knowledge from a wider set of experiences, allow internal stakeholders to add rich intelligence on well known and new suppliers, engage at the point of need with their internal teams, and raise procurement/internal stakeholder collaboration to an entirely new level.
I don’t think my BIG ideas are unrealistic. I have reached the ‘10,000 hours’ of procurement discussions milestone and can safely say that procurement as a function is going through a transformation. Although savings is still an important metric, leadership teams are expecting more strategic, innovative solutions and process compliance.
With new user friendly and social media inspired technologies (that are easily implemented, configured and integrated) there will be big changes in how we build, and share, valuable intelligence within companies and across our industries.
What are your Big Ideas for the future of procurement? Share them with us before April 21st and we could be discussing them with our influencers.
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