Over the last ten years Procurement has continued to have its importance understood and its relative priority increased, however, in truth it is still only a valued back office function.

Organisations now understand the need for compliance, improved transactional efficiency, management information and ultimately reduced price. Many businesses have invested heavily (millions £’s) in technology to automate and hired increasingly expensive ‘sourcing’ professionals, often for over £100k per annum. Some even look to consultants to run sourcing events on their behalf.

So then why, if Procurement is delivering 3%, 4%, 5% bottom line improvement with an astronomical ROI, isn’t it held up there with the highest performing business units? Why does management attention and the associated accolades go to the fastest selling new product or a disposal? Why don’t we celebrate a successful sourcing event in the same way that a major customer win is celebrated? Why don’t procurement professionals get remunerated in line with the commission structures that colleagues in Sales & Marketing receive?

It is simple, the business, despite wanting to believe the claims of benefits and savings, simply can’t translate or track what looks like excellent performance into a direct P&L impact. How often does the business look to Procurement to reduce headcount? Every year in my experience. How often does a company look to reduce a sales team that is beating its targets and delivering revenue and margin? Never!

Even the best of the best benefit tracking tools, systems and processes simply do not convert discount into bottom line vale. Are we just inventing paper work to justify Procurements’ role?

There is new thinking emerging however – operating a re-bate model allows negotiated discounts to be returned to the business in hard cash a physical cheque. This prevents budget holder re-spend and any other excuses that are trotted out to the CFO. Procurement becomes totally accountable and performance is transparent.

Procurement is a front office role, today sitting in a back office function – I want to see it at the front leading the business, bringing competitive advantage, rewarding performance and standing proud every month with a cash contribution to the P&L.