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Customer Relationship Management

Author(s):

Adam Hoy

July/August 2010, eSide Supply Management Vol. 3, No. 4

Strategies for getting your foot in the door — and, ultimately, becoming a valued business partner.

As a concept, customer relationship management (CRM) has been around for a long time. But, it has taken on an increased level of focus for many procurement groups around the globe as the function continues to grow from tactical support groups to strategic business partnerships. In turn, developing and managing relationships with internal customers has become critical. Companies are starting to put CRM-related goals into their procurement team's objectives, and some are even creating stand-alone CRM functions within procurement.

The end goal of any procurement group is to partner with internal businesses and work to get the most value out of each dollar the company spends. A strong partnership will ensure that procurement's goals and objectives are directly tied to the organization's goals and objectives. Relationships with key individuals must be developed and cultivated to develop that partnership dynamic.

The following are strategies which individuals at all levels within procurement can use to become valued business partners.

Understand Who Sets Strategy

A great place to begin is by identifying the key decision-makers within an organization — but, this often is more difficult than it sounds. In many global organizations, the colleagues who set global or regional strategies are different than the colleagues who possess local P&L responsibilities. While it is advantageous to develop strong relationships with as many internal stakeholders as possible, time constraints will often force you to prioritize.

To this end, the colleagues who set strategy should be targeted. Even if they do not have direct P&L responsibility, their strategies are often implemented by a local operational team.

Understand Your Stakeholders' Business Discipline

While this strategy might seem like a no-brainer, it is not often executed at the entry levels and mid-levels within procurement organizations. Colleagues are usually consumed with managing their category strategies and suppliers; many do not have the time left over to learn about their stakeholders' businesses disciplines. For example, if a procurement colleague is managing an enterprise category such as facilities management, developing working knowledge of this area would be highly beneficial.

Nothing builds credibility more quickly than being able to intelligently discuss the stakeholder's business area. Becoming an expert in that stakeholder's business is not necessary, but a working knowledge is. There are many ways to begin to gain this knowledge: seminars, web-based training, conferences and graduate classes are all good options.

One of the most effective techniques, however, is to join the same professional organizations to which that stakeholder belongs, and then attend meetings and functions together. Not only will the procurement colleague increase his or her knowledge of that business area, he or she will also gain valuable face time with the customer.

Talk About Business Objectives

Supply management professionals often emphasize and focus on procurement's goals versus overall business objectives. However, stakeholders with P&L responsibilities are typically far more interested in how procurement can help attain the business goals.

Procurement professionals should keep this in mind during interactions with key stakeholders. It is essential that they understand the goals and objectives of the businesses they are supporting. This enables them to act as partners in achieving these businesses' objectives through procurement strategy.

Understand Opportunities

Opportunities for procurement to add value to the business are not always presented in a clear, straightforward manner. As such, procurement professionals must develop the ability to extract important pieces of information from their discussions with the stakeholder.

Questions such as, "What are your current challenges?" are one way to get the conversation started. Generally, the stakeholder's answer generally will not be specific to procurement; even so, a supply management professional who is in tune with his or her customer's business can take this information and devise strategies to help that stakeholder.

Follow Up — and Add Value

After procurement gets its foot in the door, timely follow-up with the stakeholder is essential. This follow-up should be consistent with the type of meeting that took place. If, for example, it was simply an introductory meeting, then a brief e-mail thanking the stakeholder for its time, and offering to be of service in the future, is sufficient. On the other hand, if the meeting was held to discuss a specific issue, then follow-up should address any action items that arose.

Getting a foot in the door and a seat at the table are important steps toward building relationships and establishing supply management's presence within the company. But, it is also crucial that procurement takes what it learns from interactions with stakeholders and turns that information into value — in other words, action plans. Following through on these action plans ensures supply management's seat at the table is a permanent one.

Adam Hoy, C.P.M. is a client relationship manager in Pfizer's Worldwide Procurement group. He holds an MBA from Saint Louis University, a postgraduate certificate in finance, and is currently working on a master's degree in integrated marketing at New York University. To contact the author, please send an e-mail to author@ism.ws.

For additional CRM resources, visit the ISM articles database.

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