Does Your Business Need to Understand Category Management Principles?

Category management tips

SIG University  Certified Sourcing Professional  (CSP) program graduate  Diana Redwine  shares her thoughts on the best way to get business stakeholders engaged.

Ugh, here comes procurement, getting in our way again!

In the Tech world, the role of procurement changes with the transition from start-up to a public company. That transition is full of bumps if not addressed with a support mindset.

Somewhere in the timeframe from growth to a public company, experienced procurement talent is engaged to help move spend activities from tactical to strategic. The notion of this is much more grand and idealistic than the reality.

The Idea

Traditionally, handling contracts, licenses, order forms, etc., have been managed by the person with the need, not necessarily by someone with expertise in contract development and negotiation. With procurement added to their toolkit, the business stakeholders might say, €œgosh, it would be nice to hand this off to someone else € or €œhow do I know this is the best price/terms? €

More likely, they have been advised that a new policy is being implemented that requires procurement involvement. However, in my experience, many stakeholders view procurement as an impediment to progress and do not willingly hand off their contract needs. Hence the need to truly consider this question of just what the stakeholders REALLY need to know about category management.

As part of the growth, there comes a time when the experienced procurement pro may believe category management is the next step to securing their place in the organization as a €˜trusted adviser. ‘   Sure, category management principles can help guide supplier segmentation, supplier performance and relationship management, tail spend rigor, etc. But does the business stakeholder truly need a deep understanding of category management?

 The Action

€œI ‘m scheduling this meeting with you to introduce category management as an integral part of our move to strategic business dealings with our key vendors. €

If I send an appointment to a business stakeholder with that statement, I can imagine a thought-bubble over their head that says, €œCan ‘t wait to go to that meeting! €

What if, instead, I schedule a 15-minute Zoom meeting to discuss next steps in ensuring we are aligned on your plans for growing your relationship with vendor XX so that I can help you stay in compliance with (new) corporate policy and also share some best practices and maybe even take some work off your plate? There may still be an €˜ugh ‘ in that thought-bubble, but it ‘s just 15 minutes, and I can dazzle in that short timeframe if I prepare correctly.

If I do my homework around (a) where the spend is currently happening; (b) what is going on in the industry; (c) budget plans for the next fiscal period; (d) who is the stakeholder and what might they need; and (e) identifying one or more quick wins, I can then use that 15 minutes to start a relationship. It ‘s not a relationship built around my stunning knowledge of category management principles. Instead, it informs the stakeholder that I am here to support their needs while also paying attention to positioning my company to garner the best value. I can still perform all of the category management magic in the background and provide my leader with the data points they need to dazzle senior leadership with procurement ‘s journey to robust category management. I don ‘t have to terrify my key relationship with all that noise.

The  Certified Sourcing Professional (CSP) Program  is a 10-week course that focuses on the hard and soft skills of sourcing, including strategic sourcing and outsourcing methodologies, as well as best practices in negotiations.

Diana Redwine

Diana Redwine

Senior Procurement Manager, Smartsheet Inc.

Diana Redwine is a Senior Procurement Manager at Smartsheet Inc., delivering procurement magic to the Engineering, Product and Real Estate/Facilities teams. Her background includes a short stint at WNS Denali, 12 years in oil and gas procurement (downstream, upstream and midstream, WA to AK to TX), and 15 years as a paralegal. She recently completed the SIG CSP certification course and is still geeking out on the SIG Sourcing Wheel.