For procurement professionals, coordination with your suppliers is a must. Communication and cooperation with your internal stakeholders are great. But what separates these activities from true collaboration is a sense of shared purpose and mutual benefit. By that definition, true collaboration might look like a supplier offering ideas without being prodded. Or it might look like a sourcing manager going to a line of business leader with a concept for improving a product line—and bringing the category knowledge and spend data to back it up.
Recent research by Oxford Economics shows that most procurement executives and practitioners are in fact observing an increase in collaboration at their own procurement organization. What’s interesting is how this collaboration is taking place, in concrete terms. Over half of the executives and practitioners surveyed say:
- Procurement data is being used strategically across the organization
- Suppliers increasingly contribute new ideas for marketing and product design
- Suppliers are helping us transform our business model
The fact is, collaboration will shape the future of your procurement organization in one way or another. Digitization is your friend in that it can help automate coordination and facilitate communication. But increased efficiency is a dead end if it’s not combined with an imperative to seek profoundly new ways of doing business—and a willingness to deepen your partnerships.
It could require procurement working hand-in-hand with finance, like Verizon does to optimize supply chain financing. It could require a relinquishment of control, as the City of San Francisco demonstrated when it chose to forego a traditional, narrowly defined RFP process in favor of using “problem-solving procurement” to essentially crowdsource a wider range of potential solutions. The common denominator in both of these examples is that collaboration is a goal worth pursuing in its own right, with significant business outcomes like additional revenue, better supply risk management, and competitive advantage.
The good news is that Oxford’s research indicates procurement is well on its way to embracing true collaboration—not just a glorified version of cooperation. Have a look at the infographic below and see if you come to the same conclusion. And, in the spirit of collaboration, let me know what you think—especially if you have a different take on the topic.