The Role of Supplier Intelligence in Elevating Procurement’s Impact
Greg Tennyson and I recently had the pleasure of being interviewed by Phil Ideson (The Art of Procurement Podcast) to talk about the primary findings of our Executive Roundtables held this past spring.
The Executive Roundtable dinners were attended by 40+ forward-thinking procurement executives from across the US and generated over 12 hours of engaging conversation around the Upside of Accessible Supplier Intelligence.
The foundation for the discussions came from a study we did in partnership with The Hackett Group to measure the time spent searching for and gathering data to identify and pre-qualify incumbent and new suppliers. This is still a highly tactical and manual process that often creates a bottleneck in the procurement process. As we learned from our study, qualifying suppliers can take 24 business days (or more) and the internal and external sources used are highly disaggregated.
When the business is looking for speed and agility, waiting for procurement to validate a qualified list of suppliers is largely perceived as a roadblock to achieving their goals. This friction in the process not only impacts procurement’s ability to add value but also to positively influence business decisions that can impact the top and bottom lines.
The unfortunate truth is, while procurement manually gathers intelligence about incumbent or new suppliers, stakeholders are waiting or worse… duplicating efforts in an attempt to speed things up. They often know their business better than their procurement colleagues and will quickly turn to their peers for supplier recommendations UNLESS procurement can quickly come to the table with valuable knowledge and a trusted list of qualified suppliers.
“If you don’t come to the business with intelligence and you need time to go and find it, that is when you become the bottleneck. When you come with intelligence, you become a valued partner.” – Stephany Lapierre, tealbook
Without intelligence, procurement loses its ability to positively influence decisions. Take for example this common scenario: a stakeholder claims to know the only supplier capable of meeting their needs and wants to quickly issue a PO. What can procurement contribute if the intelligence is not available? If it takes 24 days to come back with a list of qualified suppliers, the stakeholder might have already issued a PO to the ‘only’ supplier.
Now turn the scenario around… with accessible trusted intelligence, procurement can pull up additional options and positively challenge the stakeholder to think differently or give him/her the opportunity to quickly validate their selection by instantly inviting other qualified suppliers to respond. Not only can procurement reduce the friction in the process, but he/she can also gain credibility, increase value to the business, and can ultimately impact the top and bottom lines.
It is easy to agree that procurement needs increased access to supplier intelligence for the sake of stakeholder satisfaction, but perhaps lack of access is a barrier to procurement’s own progress too. Most of the participants in our study agreed that the future of procurement is to become a trusted advisors to the business and enable stakeholders to accomplish their goals faster. This can’t happen if procurement doesn’t rethink how to identify and pre-qualify suppliers, moving away from tactical data gathering and lengthy timelines to adopt new technology that aggregates intelligence into a centralized platform that enables collaboration and continuously accelerates strategic decision making.