Summary

Procurement functions in most companies are facing a dilemma: should they focus on tactical measures to save cost or on maturing into strategic functions? Does a middle ground exist? Invariably, companies give in to cost-saving pressures. After all, every sourcing dollar saved accrues to improve the bottom line, top line and balance sheet. In this trade-off, the opportunity to become a strategic partner aligned closely with business goals is lost.

In order to enhance their function’s strategic quotient, procurement leaders need to employ certain enabling levers:

• Look beyond delivering dollar savings to the bottom line. It is crucial to align with the overall business strategy and dovetail strategic procurement initiatives to enable business objectives

• Address challenges such as stakeholder engagement and expectations, resource management and skill-set gaps to maximize strategic contribution

• Treat the shift in mindset from tactical to strategic as a change management exercise that requires a deliberate and programmatic approach