Roundtable notes from the ProcureCon Indirect West discussion on Socializing the change to a center-led professional sourcing organization

1. July 2011
How to Socialize a Change to a
Center-Led Sourcing Organization Hosts
Tom Bokowy
ProcureCon Indirect West Roundtable Notes (208) 610-0032
tbokowy@costandcapital.com
Cost & Capital partners hosted the roundtable Sebastian Fritz
discussion regarding how to socialize the change within (646) 620-4204
a sourcing organization to a professional, center-led sfritz@costandcapital.com
approach.
Many barriers exist to transforming the organization.
The roundtable discussed the challenges to begin the Participating Companies
transformation of the organization. The issues ranged from
communicating the message, publicizing executive
- Abbot
sponsorship, educating the team on the new tools to use,
motivating the team to support activities across business - Alcatel
units and creating a burning platform to show the scope and - American Cancer Society
scale of the opportunity. - AutoNation
- Brown Shoe Co.
The message needs to be constantly communicated and
- Diebold
reinforced with successes. The roundtable discussed the
methods to share successes and make sure the message is - Essilor
received. Formal training, monthly town hall meetings and - FMC Technologies
case studies are all good ways to make sure the team - Key Bank
believes in the value of changing as well as to make sure - Kuehne and Nagel
the team knows what to do to be successful. The best - Lanyon
training methods included classroom based exercises where - Las Vegas Sands
the team can apply the new tools to see how to apply the - Medtronic
tools and change their behavior to improve. - Midwest ISO
Some categories are naturally easier to be successful - Mutual of Omaha
and build momentum. The group discussed the categories - MWV
that are best to start to get some quick wins and showcase - Mylan
the value and potential of the program. Office supplies and - Rockwell
telecom were agreed to be the fastest to get right and make - Spend Matters
an impact. Categories such as facilities and contingent labor
- Symantec
require more cross-functional support. The team agreed
that external support is often helpful to provide
benchmarking and the internal alignment to be successful.
The more difficult categories include marketing, legal, IT and
professional services due to the challenges in securing
alignment with the internal stakeholders and more nuanced
methods to compare options.
Creating a culture of success. Several methods exist to
continue to build upon the success of the organization and
create a culture of expectations. The roundtable discussed
how to coach individuals and deliver feedback to make sure
the team is applying the tools as well as the softer selling
approaches to make category execution repeatable and
valuable to the organization.

2. Contract Labor Management July 2011
Working across functions. Success for many indirect
categories requires that the sourcing team is able to engage
the other functions. One of the key factors to deliver results
is the level of emotional intelligence of the team. Strategic
Sourcing needs to appreciate the value of the function and
how it contributes value to the organization. Negotiating
functional support for categories such as legal and marketing
require that the procurement professional understands the
value and total cost much more than other categories. While
all suppliers try to highlight that they are not a “commodity,”
some deliver unique value to the organization and do not
lend themselves to traditional benchmarking. Working within
the function to deliver the negotiation support needs to be
within the value framework the function is uses to evaluate
their options to in order to be successful.
Getting the most from the staff. One challenge many on
the roundtable had within their organization is the limited
staff and bandwidth to handle all the support requests.
While some prioritize based on their ability to deliver results
and the total value, other struggle with not wanting to turn
anyone away since they don’t want to lose future
opportunities. All agreed that setting expectations with the
functions as to the response time, requirements and
thresholds for involving the team are important to
communicate.
Summary
The challenge for many of the participating organizations is balancing the right categories to set up the team
for success with reaching across the organization to leverage the power and resources to deliver results. For
most organizations, this includes development in the form of training, coaching and sharing success stories
both within the organization and across the functions. While external resources are good to increase
bandwidth and improve success with outside benchmarking and knowledge, those results needs to be
balanced with developing the team and setting them up for continued results. Some categories such as
contingent labor are a good test case for the organization since it is quick to benchmark current performance,
requires cooperation with HR to be successful and the impact is visible at high levels within the company.
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