Thursday, May 15, 2014

Procurement Gets Social with Suppliers

Throw away your Conan hammer! That’s the advice Jason Busch of Azul Partners and Spend Matters gave to procurement professionals at the 2014 Smarter Commerce Global Summit. His point: you can’t beat suppliers over the head to get what you want. Not that was ever an effective practice, of course, but that didn’t stop many in procurement from resorting to it.

Today’s business environment calls for a gentler, kinder relationship with suppliers. That’s not because we’re all more in touch with our feelings in this modern era, it’s because we have the social tools to make a new way of working together possible – and not just possible, but necessary.

Procurement workers and suppliers are now able to put social tools to use in order to collaborate earlier and more closely. This gives them the opportunity to reinvent the relationship and discover new information together. Busch gave an example: under the old model, procurement might say, “Our goal is to reduce costs three percent. We can work with you on that but that’s what’s expected of you.” Today, procurement should instead ask, “How can we drive innovation together in new ways, and what systems will enable that?” The cost reductions will follow.

The benefits will accrue throughout the length and breadth of the procurement-supplier relationship, whether when working on design, changing specifications, or adjusting service levels based on business needs. There's no longer any reason to resort to the hammer. Busch said procurement pros shouldn’t even keep the hammer as a backup – just throw it out. Conan might disagree, but then he wasn’t wielding today’s powerful social business tools.

from Social Business Insights Blog


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