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How to Figure Out Procurement’s Stakeholders and Define Their Needs

May 20, 2014 by Andres Kuuse

Company stakeholders

Every company can be broken down into groups.

Each group supports the organization by carrying out a unique function. Without their support, the organization would cease to exist. These groups can be considered company stakeholders; without them, the company falls apart, but if the company falls apart, they’re not able to function.

Usually every company has it's own strategic needs and objectives for the future, just as every company stakeholder has its own needs and objectives. Oftentimes they aren’t the same as the company’s. And more frequently than not, they aren’t what the procurement department might think they are.

For the procurement department to be as effective and as valuable as possible to the company and its stakeholders, it's essential to first define the company’s interests and needs along with those of every stakeholder.


Who are Procurement’s stakeholders?

Each company has it's own identity, so the stakeholders may vary. The following are some business groups you might consider your stakeholders.

Internal stakeholders:

  • Finance
  • Sales and Marketing
  • Management
  • Company Owners
  • Production
  • Prospective employees

External stakeholders:

  • Suppliers (Partners)
  • Customers
  • Industry trade groups
  • Competitors*

* Don't underestimate your competitors. They might have a huge competitive advantage over your company because of their suppliers or the strategic processes they run. Some of these strategies may be beneficial to your company, and you could stay competitive by implementing them as well. Therefore, the procurement department should be well aware of the competitors’ processes. Usually this information can be found on the market; it’s just a matter of staying focused and looking for it.


How do you define your stakeholders’ interests and needs?

There is no single formula to define your stakeholders’ interests and needs. This process depends on of the size of the company, business sector, market situations, etc. However, there are still some basic principles to follow.

Internal stakeholders:

Within the company, make it a goal to schedule meetings with the managers of each department to discuss their department’s needs and objectives. Then, find a way to map their interests and needs onto those of the procurement department.

When meeting with management, you should also ask them to provide you with information regarding the company’s strategies and future goals for their department. With this information, you’ll be able to determine how the procurement department can help them meet their goals.

External stakeholders:

The key external stakeholders are your suppliers or partners. You need to know what they expect from you, and they need to know what you expect from them.

When meeting with your strategic suppliers, you should pay attention to their risks since you want to lower your future supply chain risks. You might want ask yourself this question: Does this partner have all the necessary prerequisites for fruitful collaboration and a risk-free future?

You should focus on establishing effective ways to cooperate and communicate with your suppliers.

In order to define expectations and needs from other external stakeholders (e.g. customers), you should consider both qualitative and quantitative research methods. External consultants or service providers can assist you with this type of research if your company doesn’t have the internal resources to provide this information.


What to do next

Once all the stakeholders’ expectations and needs have been defined and you can lay them out in front of you, you can then start planning procurement strategies and setting up your own objectives.

If your objectives are already in place, then you need to examine your department and make sure you have the proper team and skill set to execute them.

It's important that the company’s top management buys in to the procurement department’s strategies and objectives. They are the ones who will support you while you execute any company-wide plans. Furthermore, you will have to report to them and inform them of your progress at future meetings.


procurement policy template free download


Andres Kuuse

Written by Andres Kuuse

I am a co-founder and the Customer Support representative at DeltaBid. I’m passionate about creating an easy to use tool that helps procurement and e-sourcing people do their job better. Just as SalesForce revolutionized sales development, we will revolutionize procurement.


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