Why earning trust should be your top procurement priority

In a recent survey by The Hackett Group, three-quarters of survey respondents said that procurement teams need to become 'trusted advisors' to succeed in a challenging environment, we discuss the ways you can become a respected confidant to stakeholders
Why earning trust should be your top procurement priority

As the role of procurement within business continues to grow, so objectives have to change.

In 2015, traditional targets such as reducing costs are still considered very important. However, as The Hackett Group's Key Issues 2015 study concludes, and as many already know, that is no longer enough.

Procurement teams need to become a trusted advisors (TA), both internally and externally to really succeed. And Hackett's study agrees. A whopping 72 percent of respondents said that elevating procurement's role to that a trusted advisor was a "critical" priority.

Despite it being considered a major issue, the study revealed a worrying flaw in current procurement teams. They are just not well-equipped enough to build trust.

After all, being a TA is not a walk in the park. The definition of a trusted advisor is broad, but according to The Hackett Group it includes everything from being an executive presence during planning and budgeting to allowing the execution of business by thorough market research and insights. It also means having the right set of skills to do the job (and let's be honest, who's going to trust you without those?).

Mainly though, being a TA is about being seen as having an honest interest in supporting stakeholders and realising their business goals (and not just for your own agenda).

So how does procurement go about achieving its goal of being a trusted advisor?

To be trusted advisors, procurement teams need to elevate their status from purely service providers to reliable and credible support service.

According to Simon Brown, Director of Future Purchasing to be trusted you need to really invest in building a relationship, and as always, taking the time to do this is key.

"Imagine being in a position where your stakeholder sees you as the first person to contact when an issue arises," Brown says. "To achieve this level of relationship will take time and you will have to build through four different levels of relationship."

Rising through the four levels isn't easy either. The majority of procurement's relationships with stakeholders remain at the service provider or enhanced service provider level. The focus here is on giving insight and providing ideas on a stakeholder's business issues at the same time as steadily building a fairly good relationship.

However to be a TA, a procurement team needs to do more. It must have a complete understanding of a stakeholder's needs. You should also be the first point of call if a troublesome issue comes up. In short, there has to be depth, substance and strength to the relationship.

Brown agrees: "[Your] relationships depend on the breadth of business issues that are covered within your interactions with a stakeholder, as well as the depth of personal relationship you have with them."

To get to the upper echelons of trust, you need to do a number of things, both business and personal. These include focusing on the stakeholder and not necessarily your business, advising and consulting those you are working with rather than telling them what to do, and really building trust by being reliable and providing credible support when you interact with them.

To be considered a trusted advisor then, procurement has to be able to step out of its traditionally isolated existence and become comfortable with sharing its knowledge; helping stakeholders develop and grow. When that happens procurement will be able to better integrate with the business as a whole and vice versa. Now doesn't that sound like a good idea?

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by Laura Stackhouse

readmt.com Editor

Laura Stackhouse is the Web Editor of readmt.com, an official publication of the International Marine Purchasing Association (IMPA). To discuss news, features or contributing to readmt.com please get in touch.

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