Part 1: In Conversation with Sebastian Chua on Thinking Ahead Strategically

The traditional ways of managing procurement has been challenged with the onset of COVID-19. In my opinion, procurement teams must shift from reactively mitigating problems to proactively refining their approach. Thanks to digital transformations, supply chain management tools and alternate sources, procurement is indeed equipped with the foresight and expertise to minimize disruptions.

With procurement playing roles in finance, inventory, operations etc., the whole ecosystem should have a voice in how decisions can be made with communication being transparent and open. Being able to anticipate where and how a disruption may come about, gives you lead time to come up with a mitigation strategy. Let find out more with Sebastian on thinking ahead strategically.

How important is operating with a proactive rather than reactive approach in procurement?

“The single biggest challenge for procurement has always got to do with stakeholder leadership. Usually, this comes from complaints like: they don’t value procurement, they resist the change we want to make, they don’t bring us in early enough for the conversation. In my over 20 years in procurement, the same issue still keeps coming around. The truth is that these challenges won’t go away, unless we make them disappear!

Do we see these stakeholders as our customers? Do we examine what their experience is in dealing with procurement? After all, we do provide a service to them.

It is reasonable for our stakeholders to want these values from procurement: savings, speed, quality and efficiency. However, what is more challenging for procurement is to deliver on these 3 expectations from the business leaders:

One, I am not keen, just sort out the maze? i.e. putting compliance in order

Two, have you tell me what I don’t know? i.e. what is new to me?

Third, have you make me feel special? i.e. successful

A large part of procurement job involves to persuade, challenge and influence the business leaders for better decisions. When engaging the business, have we care? Do we know their motivations? Do we speak their language? i.e. growing more business, providing customer value, driving speed to market. Our success is defined by how well we shape and manage the web of business relationship.

We should innovate to make it easier for people to come to procurement – make it fun and interactive. Make people want to come to procurement, rather than they have to by the policy. There is no magic trick in winning over business confidence. It requires a lot of passion, perseverance and building credibility by delivering win. The win may be small initially, but it will grow when we become more engaged in business. When we start to win, people believe in us. This is where collaboration is formed, and collaboration is key to any transformation.

Do we know what is our current state of stakeholder leadership? Are we seen as “Irrelevant”, “Ad-Hoc”, “Consultative”, “Business Partner” or “Business Inclusive?

Are our strategies and actions aligned with business goals? Have we verified the importance of our action plans? Have we been patient, less defensive and actively listen to business needs? Have a wrong perception of procurement start to form? Remember this: Our response drives customer perception of us!

It is only together with our business leaders, can we deliver a truly superior procurement journey. Sometimes, it is not the procurement outcomes that define our value, but the engagement journey that matters. A high procurement performance does not guarantee us a high customer satisfaction. We must make sure that we are performing on areas that are of real importance to the business. Often, procurement is seen as working on something that is urgent, but not important to the business, which is a very sad thing. The key factor to customer satisfaction is to focus on business contribution, not so much on our performance.”

Once we start recovering from the pandemic, we’ll not be “back to normal”. Procurement will have to articulate and refine its’ framework, unlock the insights on how their function and drive the business forward. All in all, cut through the heretical layers and silos style, but embrace an interconnected pool of people with a focus beyond efficiency and cost savings.