When a supplier is chosen to provide outsourced strategic procurement solutions, they are measured on the ROI they generate, and their impact on the bottom line. However, the multi-year duration of their contract, and their desire to expand the length and breadth of their relationship means that they have to take a long term approach to building sustainable relationships. The programs that are the most successful in doing this consistently follow the same best practices.
A number of these best practices can also be applied to internal strategic procurement groups. While a number of companies apply some of these practices internally, the most successful implement all of them as part of an overall strategy to elevate the role of procurement.
Here are three examples of best practices from successful outsourced procurement programs that you can apply to your internal team today:
1. Have a formal SOW and KPI’s in place with your key stakeholder groups.
Manage your relationship with stakeholder groups as if they are an external client. Formal SOW and KPI’s increase stakeholder engagement and promote transparency and the pursuit of shared objectives.
2. Have a strong governance program that formally involves client executives.
Multi-level governance programs with active participation from cross functional executives help drive change, ensure relevancy, remove roadblocks, increase stakeholder buy-in and increase your program performance.
3. Partner with Finance and the CFO to “Follow the Money”.
CFO’s do not trust “procurement math”. You should track and report actual savings achieved vs. projected savings to increase your influence with your Finance peers. If Finance can see the bottom line impact of your efforts, they will become your #1 advocate.
For more information on this subject, I am hosting a webinar on Wednesday October 28th titled “How to Apply Outsourcing Best Practices to Improve the Performance of Your Internal Strategic Procurement Group”. You can register here.
Webinar registrants instantly receive a copy of our free report “10 Outsourcing Best Practices that You Can Apply Today to Increase the ROI of Your Internal Strategic Procurement Group”
This webinar is part of our Procurement Performance in 2016 Series.
If you are interested in understanding how your company can apply procurement outsourcing best practices to improve the performance of your team, please do not hesitate to reach out.