Procurement Transformation: What can You Learn from Marketing?

Mikael Bechsgaard is the head of procurement for fast-growing biotech company Novozymes and brings a somewhat unusual background to the table, namely: consulting and marketing. That has turned out to be a great advantage, however, as a senior manager recently congratulated the procurement team on "the best results in 30 years."

The secret, according to Mikael, is to realize that you cannot be everything to everyone. Instead, you need to understand your end-users, and segment the customer base accordingly.

One of the key hurdles in getting customers on board, he discovered, was that they generally didn't know: a) whom to contact; and b) what they needed to do. Clarifying this process, along with other innovative marketing approaches, has helped to encourage customers in using the shared procurement service for indirect purchasing. "The customer needs to understand how we are relevant to their business," he explains.

Three initiatives in particular have helped procurement to become more effective: first, co-sourcing, which has reaped some impressive results; second, e-sourcing; and third, leveraging a sourcing model that includes moving transactional aspects to India. Results include not just double-digit cost savings, but increasingly also the respect and support of senior managers in terms of understanding what procurement can bring to the table.

Listen to the interview.

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