Some aspects of high-tech procurement are universal. Just like in other industries, there are categories to manage, ecosystems to develop and design, stakeholders to partner with, and value goals to meet or exceed. But, if you take a slightly deeper look into this space, you’ll see things start to diversify, with a few practices taking a front seat in the critical tool set.
After working closely with companies in this sector for several years, I’ve seen these same best practices bubble up time and time again in successful high-tech procurement organizations. And while they may be required everywhere, the following practices rise to the level of “make-or-break” when it comes to forward progress in this industry.
1. Clear Out the Clutter
To add value, it’s key to first understand and address the fundamentals, and establish what’s important for the organization across all elements of AQSCIR (Assurance of Supply, Quality, Service, Cost, Innovation, and Regulatory). That’s a difficult thing to do when the field is crowded, as it often is in a bustling, high-growth tech company—finding those root requirements becomes a bit of a “Where’s Waldo” experience. To start, clear out as many of the non-relevant details and noise as possible in order to distill critical business needs. Once you have those in hand, ensure you’re addressing all those business needs through your work.
2. Get Aligned
As with all other sourcing work, make certain you’re in lockstep with your stakeholders and firmly understand their priorities, vision, and business imperatives. Know what’s most important to them and how they are being measured. Find direct alignment with all goals--the company’s, the stakeholders’, and, yes, your own. Complete alignment ensures everyone is walking toward the same ideal outcome. The more you understand their world, the more innovative ideas you can foster. Finally, always consider how you can make your stakeholder’s job easier. Do not overcomplicate working with procurement. Enabling efficiency is a very important relationship growth factor.
3. Think Innovatively
High-tech companies depend on innovation for their very survival. A procurement approach that does not employ concepts of design thinking and disruption will fall short. Innovation not only reinforces alignment, but also enables you and the business to strengthen your relationship as you brainstorm valuable new solutions together.
I witnessed this phenomenon firsthand with a car manufacturing company a few years back. Procurement was collaborating with developers and engineers around the application and implementation of new sensors, cameras, and other AI-focused innovations for cars. Questions arose as to whether this workstream was something the company could fully manage and run with internally OR if deeper collaboration with third-party suppliers to gain better insights, innovation, and capabilities to help the organization take the new turn they were envisioning was the right approach.
Here, Procurement was involved in discovering the best path forward, not as a savings driver, but rather as a transformation driver that could incorporate savings as a by-product of innovation. Everything had to come into place to land on the best approach—alignment, Sourcing Process Management, design thinking, clear expression of needs, and several other factors.
4. Act Quickly
Procurement in high-tech organizations must operate at a speedy clip; slowing things down is truly not an option. The culture in high tech is fast, and, as a procurement partner, you need to be able to act quickly, resolve quickly, ideate quickly, fail quickly, and always be in close communication with the business as things perpetually swirl in the periphery. A proactive, urgency-based, and agile procurement leader will win out in these organizations every time.
5. Be Highly Fluent in Human Skills
There are four skills to emphasize, specifically, that make a big difference to the high-tech procurement practitioner:
Be able to communicate well and interact expertly--in the high-tech space, just like everywhere else, the ability to connect meaningfully with stakeholders, suppliers, and other partners is a critical capability.
Plug into your curiosity--the best procurement practitioners in this sector seek a deep understanding of both the company and its operation at all levels to inform their collaboration.
Be both detailed and strategic--make sure you’re seeing both the forest AND the trees in all cases. To ensure success, you’ll need to see and understand the overall business strategy, but also be able to zoom into the tactics required to execute well, manage with mastery, and “get things done” quickly.
Be financially fluent--having an ability to deep dive with business executives and stakeholders on business finance is a huge help in driving innovation. Bonus points if you know how financial modeling works – a skill that many procurement teams need to succeed!
So then, with all these necessary characteristics and skillsets, where does one start? A simple way to take the first step forward is to see where you are right now. Ask yourself the following questions related to your high-tech procurement organization:
Do we have the correct relationship foundation and operating model in place?
Do we have the human and business skills required to support our internal/external users?
How would we like our organization to view Procurement? How do they currently view us?
Have we delivered on our commitments to the business?
Are we helping our stakeholders to innovate?
Do we have the right mindset in place to move quickly and intentionally?
As with anything else, success comes one step at a time. Each move forward will create incremental benefits for your organization that build up to big change over time. If you’d like to dive deeper into best practices in high-tech, feel free to download the High-Tech Procurement Transformation Kit or the Design Thinking for Procurement Handbook to learn more. We also invite you to join the discussion on LinkedIn to share your thoughts and perspectives and to keep collaborating. You can follow us here!