Profit from Procurement

6CROSS-FUNCTIONAL CHANGE: Repositioning the Function as a True Partner

This chapter is somewhat shorter than the other chapters in this book. Cross-functional change management is a key theme that runs through all the chapters of this book, so in order to avoid excessive repetition, we've kept this one relatively short and to the point.

Why Is Cross-Functional Change Management Important?

Procurement is very much seen as a profession / a function of experts that do a discrete thing. The problem is, as soon as you view it that way, you limit its potential by casting it as separate from the other functions.

Procurement's very existence is cross-functional by nature—it only exists in order to help those functions procure their supplies. And, of course, while Procurement can influence, in most companies, 50% to 80% of the cost base, it doesn't actually “own” any of this spend and is not ultimately in charge. That makes life difficult…it means that Procurement can't do its job out of a position of authority, but it must use sophisticated influencing skills to work effectively with other functions.

As discussed in Chapter 1: Introduction, in many companies the budget-holders effectively do their own Procurement…with Procurement just coming in at the end to finalize contracts and, at best, negotiate an extra discount at the eleventh hour. The problem is that the budget-holders don't necessarily have the skill, or the objective, of optimizing the cost of what they buy…they care far ...