Selling the Procurement Value Proposition

Procurement Value Proposition

How we sell the Procurement Value Proposition within our organisation results in how we are perceived; strategic or tactical, valued business partner or operational necessity. So, what are the key challenges that face us in selling the Procurement Value Proposition and how should we set about preparing and delivering this in order to be successful?

Timing is Crucial

Good delivery at tactical and operational levels is a precursor to being able to successfully sell a Procurement Value Proposition. There will be little interest in the value of Procurement if operationally purchase orders can’t be placed or new suppliers assessed and created. The exception to this is if the value proposition is embedded in a Procurement Transformation Programme that also addresses key operational failings.

Understanding of where Procurement currently is on its journey within an organisation and an honest view of current performance, where possible benchmarked against other organisations, is necessary at this stage. The timing to develop and sell a Procurement Value Proposition needs to be right.

Value is in the eye of the beholder

What is perceived as ‘value’ differs in each organisation and by individual stakeholders within an organisation. A strategydriven organisation will be interested in how Procurement transformation contributes to its strategy. An organisation driven by operational targets will want to know how Procurement contributes to those targets. Likewise, a CFO may only be interested in hearing about Procurement’s in year cost reductions. Whereas a CIO with project budgets to exploit and year-on-year cost reduction targets to achieve, will want to hear about cost avoidance. One size will not fit all; multiple targets will be required to meet the diverse needs of key individuals.

Stakeholders may not always be those individuals that Procurement usually engages with. A broader stakeholder identification and mapping exercise will be required, followed by stakeholder engagement to determine what value means to them. It is important to undertake this exercise – don’t guess – because only once this stage is complete can you then start to build a Procurement Value Proposition that will be successful within your organisation.

Selling doesn't come naturally to procurement

In procurement we are in the privileged position to observe many salespeople at different stages in their career and at different levels of seniority and ability. We all know what ‘good’ looks like, but how do we compare at selling? Stepping to the other side of the table and being required to sell something to a potentially sceptical audience isn’t something that we tend to be experienced at or trained to do. Yet, this is what is necessary for a value proposition to be accepted and, better still, supported within an organisation. Difficulties often arise at this stage in the process because skills are not always matched to the task. Sales training, or more specifically, Business Partnering training can yield great dividends at this point.

Measurement is key

If we sell a value proposition to the organisation, then we must be able to measure and report against it. Success will drive a virtuous circle where more opportunities are created, more can be achieved and reported on which, in turn, creates more opportunities. To ensure success, measures must be aligned to the value proposition developed in the first stage. Some measures will be subjective, such as alignment to strategy, and some will be objective, such as in-year cost reductions. Both are valid. Where possible, financial measures should be audited and signed-off by an organisation’s Accounts division.

Business partnering

The development and rollout of a Procurement Value Proposition goes hand-in-hand with ongoing business partnering. Over time, targets and measures will change. Business Partnering enables this to take place organically with Procurement acting as trusted advisor to stakeholders. The Procurement Value Proposition needs to remain permanently aligned to both organisational and individual stakeholder goals.

While Business Partnering is not necessary to the development and rollout of a Procurement Value Proposition, it is often deployed in parallel to ensure the value proposition stays fresh and continues to deliver over time.

To effectively sell the procurement value proposition, the following steps are recommended:

  • Timing – Is this the right time to develop and launch a Procurement Value Proposition? Consider current operational performance.
  • Value definition – What determines value in your organisation at both an organisational and individual stakeholder level? Consider stakeholder mapping and engagement.
  • Selling – Do you have the right skill set for the proactive selling and objection handling that will be required? Consider Sales training, or more specifically, Business Partnering training.
  • Mesauring – Do the measures in place match the targets in the Procurement Value Proposition? Consider a mix of subjective and objective measures with financial measures being audited and signed-off by the Accounts division.
  • Business partnering – Will Business Partnering be rolled-out in tandem with the Procurement Value Proposition? Consider how the Procurement Value Proposition will evolve to remain relevant and continue to deliver over time.
Mark Elkington

Mark Elkington

Senior Managing Consultant at Barkers Commercial Services Limited

Mark is a CIPS qualified professional who throughout his career has focused on roles that require a high degree of stakeholder management to deliver results. Mark has a thorough understanding of the strategies required to ensure that Procurement departments are recognised as agile, responsive functions and that they fulfil on that promise.