Top 10 Questions Your Procurement Team Should Be Able to Answer
As a procurement professional, it’s up to you to walk into a conversation armed with meaningful data that offers value and helps stakeholders achieve their overall objectives and questions.
Too often, procurement is viewed as a bottleneck in a tangle of corporate bureaucracy. You’ve got to show up in a way that proves you’re there to support your stakeholders’ objectives.
Being able to go into a meeting backed with insightful business intelligence is a powerful way to build credibility and help stakeholders achieve their goals. But you need access to clean, quality data. “All procurement systems are built on some kind of data,” says Conrad Smith, CEO of Graphite. “Not having good data in place means you don’t have good results.”
Right away, if you’re armed with this crucial information, you can show stakeholders:
- Who their suppliers are
- Where they’re spending the most money
- Where there’s an overlap of suppliers
Strategic business leaders will immediately ask you these types of questions. If you can’t answer them, you’ll end up looking incompetent and losing credibility. And internal credibility is massively impactful and valuable to the overall procurement results you’re trying to achieve.
But a lot of procurement teams don’t do a good job at answering these basic inquiries.
Can your data workbench answer these questions?
The following questions provide the framework for a meaningful discussion with every business stakeholder. You and your most experienced people may already be doing this anyway. By empowering your novice sourcing members with business intelligence that easily answers these questions, your entire team will build value and credibility:
1. What’s your total spend?
2. What is the total spend roll up to any leader (organization), or cost center (department/team)?
3. Who are the top suppliers who make up the spend?
4. How much is being spent with those suppliers? (both within that department and company-wide)
5. What are we buying from those suppliers?
6. Are we buying this good/service from other suppliers? If so, ask whether the redundancy in this space is actually adding value or not.
7. What are the stakeholder priorities and objectives?
8. Where are the top opportunities to bring additional value to this spend?
9. Are there any other teams using the same supplier(s)? If so, there may be an opportunity for cross-company collaboration on deals or suppliers.
Smith explains, “What if by consolidating thousands of individual accounts into two or three enterprise accounts, you were able to save 30-40% on your supplier bill? Imagine saving 30% on $100,000,000. That’s a huge savings just by doing some very basic stuff.”
10. What is the risk associated with these suppliers?
If you can answer all of these questions and then tie it back to what your stakeholders are trying to accomplish, you’ll be a superstar in their eyes. Again, it comes back to what the data reveals about these opportunities. That’s what procurement should be talking to business leaders about. Aaron Oyler, Chief Product Officer of Graphite says, “He or she with the best data always wins, whether in terms of a negotiation or just looking good.”
Even if you’re sending your newest procurement team members into meetings, they’ll perform well and add value at a very high level if you’ve enabled them with quality data and a standard process.