How Procurement Can Re-invent Itself In The Workplace

This interview is taken from an episode of the Spend Culture Stories podcast. In this episode, Kelly Barner from Buyer’s Meeting Point chats with us on the new role of the procurement executive, and how procurement can reclaim itself as a key function in an organization. She explains the hilarious and shocking stories behind how the role of procurement is behind everything that we see. 

About the Podcast:

Your company culture might attract talent, but your Spend Culture will make or break your company. The Spend Culture Stories podcast helps finance leaders learn the tactics, strategies, and processes to build a proactive Spend Culture. In this podcast, we have human conversations about the messy and sometimes hilarious stories that happen when people, organizations, and money meet. Learn how to pick the right tools, implement the most efficient processes, and how to develop the right people to transform the Spend Culture of your organization for the better.

How Procurement Can Re-invent Itself In The Workplace

Kelly Barner owns, manages, and edits procurement resource hub Buyer’s Meeting Point. She has a unique perspective on procurement from the numerous roles she has held during her 15 years in procurement. Kelly worked for Ahold USA (parent company of grocery chains Stop & Shop, Hannaford, Giant Landover, and more) on their not for resale sourcing team, specializing in systems implementation and hired services category sourcing. She spent three years as the Associate Director of consulting services at Emptoris before it was acquired by IBM in 2011.

In this episode, Kelly chats with us on the new role of the procurement executive, and how procurement can reclaim itself as a key function in an organization. Procurement is often seen as boring and ‘unsexy’, but not to Kelly. She explains the hilarious and shocking stories behind how the role of procurement is behind everything that we see.

Speakers: Kelly Barner, Managing Director and Owner, Buyer’s Meeting Point

Listen to the Episode Here:

Notable Quotes:

Q: What are some of the new skills that you think procurement professionals need to develop in order to really move forward in their career especially today?

Having Strong Active & Passive Communication Skills

Kelly Barner [00:09:23] Sure. So, I think for me this kind of falls into two buckets. The first bucket is, I would say around communications. I mean obviously, there’s been a lot of talk around procurement has to be able to present, we have to have the skills to influence. We have to be able to write good emails sometimes on very sensitive topics either to the Csuite or to a supplier.

So we have to have good outgoing, overt communication skills, speaking, written, all of that kind of thing. But there’s also the more passive communication skills that in some cases I think are even more important. So, for instance, the decision around timing. So, I receive a critical email from a stakeholder or from a supplier. Do I e-mail back or do I call? How long do I wait? Do I involve anyone else? There’s a lot of strategic decisions around that. And then, of course, all of the things involved with absolutely anything face to face.

I was having a conversation with somebody earlier today about being in a people business and really when you think about it except for maybe very hands-on manufacturing, every single business in the world is a people business because it doesn’t matter what you’re doing you have to be good at working with other people.

So, reading situations, reading body language, being able to handle a difficult situation on the fly, thinking through the little details, like where do you sit people in a meeting or how do you open a meeting, how do you handle conflict resolution whether you’re an intermediary or whether you’re one of the involved parties, I think a lot of those, I guess, I’m calling the passive communication skills but they’re still actions required, sort of the reading of other people and the interpretation of situations, I think that’s incredibly important.

Understanding Business Context and the Bigger Picture

And the other thing that I would say and this isn’t necessarily new, I think it’s a need that continues but it’s general business acumen, understanding what’s going on the greater context of the company and that might be following news about your own company, it might also be making sure you set aside sometime every day for trade publications or reading the Wall Street Journal, something broad like that.

I think it’s very easy to focus on exactly what’s on our desks every day and forget why we do it, the bigger system that we have to fit into. So, really being educated about the business world in general.

Learning Beyond Your Function

But then on a detailed level, you have to be comfortable reading financial statements but you also have to understand sort of the unique rules that go into creating those statements because in some cases, they shape how procurements results are captured.

It’s not as simple as, oh, you know, we saved a million dollars on this product or service and so look, look –  the bottom line got a million dollars bigger. It’s not that simple. An incredible value may have been gained. The same is true when maybe we’re working a cost avoidance-type project and we can’t mitigate all of the increase, so you’re still absorbing an increase, well, okay, well, not all of that increase is going to be immediately evident on the financial statements.

And so it’s understanding things, like the difference between consumable supplies versus a capital expenditure that has a depreciation schedule that’s going to affect how the company recognizes the acquisition of that asset as well as the savings that go along with it.

 And a lot of times it also comes down to what the working capital policies are of that organization given you know what’s the current cost of capital, what are the other projects that are going on. All of those things should either be affecting procurement priorities or should be affecting how we report our results and where they expect that effort to be evident to people following the company.

Q: What are some of the main stakeholders that you think procurement really needs to kind of collaborate with more on and also kind of making sure that the KPIs are being aligned within an organization?

The Obvious Answer – The CFO & Buyers

Kelly Barner [00:13:55] The obvious stakeholders are the CFO and all of the distributed buyers. I think one of the things that’s an incredibly cool that we’ve seen happen over the last few years is that as procurement has started to maybe relax a little bit and take a more strategic point of view, we’ve accepted the fact that some of the buying activity has to be distributed to different people in the organization, sometimes that means globally, sometimes it just means different desks within our own building.  

 Decentralizing the Buying Process Through Technology

But allowing technology to either take people through a guided buying process or giving people greater autonomy around making supplier selections or making a purchase of an approved supplier list, that’s incredibly empowering but it also creates a lot of different kinds of stakeholders.

Kelly Barner [00:14:48] So, there are stakeholders in the form of budget owners that are looking to us to help them achieve what the business needs of their team or their function and do it in a resource efficient way.

Everyone is a Procurement Stakeholder

But then there’s also the person that needs a new keyboard, the person that needs access to a temp. If there’s anybody in the company that needs a product, needs a service in order to do their job and it is so difficult to get that that it diminishes their performance, that’s a problem.

So all of those people are procurement stakeholders and we need to be sure that whether it’s the user interface they’re dealing with, whether it’s a governance or approvals process, or whether it’s something as simple as knowing when is it okay for me to run down the street office depot and put something on my p card versus when do I have to go through a punch out catalog and get some kind of formal approval, the simpler and easier and lower friction we can make everything, the better but really almost everyone in the company is some kind of stakeholder to procurement.

Q: So I’m curious, how can procurement as a department kind of work together with other departments to make spending on behalf of the company a little bit more proactive? What are some of the processes that you recommend some people take?

Kelly Barner [00:17:54] So I think the important thing for procurement to remember is, when we prepare for these meetings, we’re looking at dollars and cents, we’re looking at supplier names, we’re looking at category taxonomy. But the people that we’re meeting with think about their business plan, they think about the objectives and KPIs that they needed to fulfill for the year.

Kelly Barner [00:16:34] And I think procurement can really make serious progress if we can find a way to connect those two things. And sometimes it’s a matter of saying, okay, I can see that you spent a huge chunk of your budget with this supplier or on this product or service. Talk to me about how that product or service is connected to you being able to achieve your objectives.

Talk Procurement in Terms of the Product or Service, and Connect it To Their Mission

Kelly Barner [00:19:45] And so procurement can avoid having that mistake keep being made and in perpetuity by don’t talk about it in procurement speak when you’re sitting down with stakeholders or budget owners, talk about it in terms of the product or service that they’re buying and how that’s connected to their mission as a team.

Kelly Barner [00:20:05] I think putting a little bit of effort into that and preparing a mental translation because let’s face it, you know we do spend time with this in our taxonomy or the way that the supplier information has been standardized and enriched and presented back to us.

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