How To Engage a Sourcing Relationship With The Business Owners
Let’s say that you are a recent hire at your company and have taken the sourcing manager role. You will be working in procurement alongside supporting the marketing team. As you venture into this role, it is important to ensure successful engagement with the marketing team business owners - but how can this be done?
Fortunately, there are a few concepts to keep in mind to ensure effective collaboration and adequate performance.
Understanding The Business
It is essential for the sourcing manager to understand how marketing works within your company. This pertains to understanding how the marketing organization is structured and the different roles within the team.
Ensure understanding of the team’s priorities and pain points as well as the marketing budget that is approved every year. Also, try to participate in the weekly marketing staff meetings and provide any input that would be beneficial to the team.
Understanding The Current Spend
You will need to get educated on the existing marketing suppliers and review all contracts to understand contract pipelines. The goal is to obtain as much information as possible, including reviewing performance SLAs to ensure that suppliers are meeting expectations.
The People Within the Organization
Understanding the people within an organization is an often overlooked concept that should be brought to the forefront. It allows a manager to really scope out the skillset of each individual and play to their strengths. This means that you will have to take time to understand the people in the organization pertaining to their backgrounds and personality makeup.
Does an individual want to lead a negotiation or does that person prefer being behind the scenes with procurement in negotiation? Understand the dynamics of the organization to get clarity on what the roles will be for future sourcing events. You will likely rely on the marketing team for domain expertise and take the lead on the sourcing events. However, this may not be the case, and you will need to adapt based on the strengths and wants of the marketing team.
Drilling Down On Analytics
Data is critical and will be valuable for you to build credibility with the marketing team. Learn how to pull reports that are comprehensible for the team and further educate them on the marketing spend for all key suppliers. There will also be valuable analytics for key sourcing events, in which you will have to assist in drilling down on all of the costs for the events (e.g. expenses and hourly fees for the personnel).
Reviewing Spend Twice a Year
The team should be conducting spend reviews twice a year, with one being prior to the new yearly budget and the second being mid-year. This needs to be on the agenda during the marketing staff meetings. Ensure to educate the marketing management team on what has been spent over the past few years by supplier and inform them on contract pipelines that are coming up for renewal. It will be beneficial to have a Finance Planning & Analysis (FP&A) representative in the review meetings.
Sourcing Events Process and Toolset
Assist and educate marketing on the sourcing process/toolset for sourcing events that are being worked on. Sourcing events can be frustrating to work on for the business owners, which is why it is essential for you to be there to assist marketing and ensure they are being proactive on what will be required. Educate them on the procurement cycle time to ensure that it will meet their expectations. The goal is for you to be the go-to person for any questions/issues that may come up during the sourcing event.
Partnering With The Business
To be a successful business partner, you must focus on both soft and hard skills and establish a strong partnership to ensure governance to further optimize the spend. If you are seeking to improve your sourcing category partnerships but are unsure where to start, you should consider seeking outside counsel to oversee your sourcing team strategy.
Mike Glass runs GPC (Glass Procurement Consulting), a procurement consulting firm focused on optimizing a company's spend. Mike has worked in senior procurement management positions at NVIDIA, Google, Meta, Fitbit, and Flextronics. Mike would enjoy getting your insight on any procurement topic, feel free to contact Mike at mike@glassprocurementconsulting.com.
