Should We Use The Word 'Customers'?
Should procurement refer to stakeholders as ?customers?? It depends on who you ask, it turns out, but there?s no lack of passion on either side of this strange argument.
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My last blog on the range of terminology used to describe ?procurement? sparked a lot of debate on the interchangeable definitions of key terms. And while we didn?t solve anything last time, there?s a definite value in the discussion: functions and teams are still understanding what they are and how they sit in relation to the other points of the business, and the language they use is plays a role in that definition.
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http://www.ism.ws/pubs/ISMMag/index.cfm?navItemNumber=5471 So, is procurement a service function ? and if so, does it have internal customers? Let?s have a quick look at both sides of the coin.
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Yes: Ultimately the procurement role is to acquire goods on behalf of stakeholders, and by doing so they perform a service to meet their stakeholders? needs. All of which sounds quite similar to customers in this context. More often than not the stakeholder is responsible for the budget, as well as the specification of requirement and it?s the stakeholder who will ultimately be relying on the quality and consistency of the supply user. Again, that description comes very close to describing a customer ? though perhaps it?s a little narrow to think of stakeholders purely from an operational perspective when you factor in finance, for example, who aren?t always supplied by procurement, but do rely on the team in other ways. Are finance considered customers too? That could be an unhelpful way of thinking?
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No: Procurement is considered by many as a back office function with little input to an organisation in comparison to departments like finance services. Branding stakeholders as customers gives the perception that the procurement role is to fulfil only the needs of the customer and that they deliver no objectives or strategic value of their own. In actual fact it is very much a joint effort and the procurement professional is as important in the process as the stakeholder.
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Procurement has its own objectives that can get overlooked if we think only in terms of customer and delivery. Sustainability or regulatory governance might not be prime concerns of an internal ?customer?, but they matter plenty, from a business perspective. Moreover, there?s an issue with subservience ? what if our ?customers? just want us to leave them alone to do the buying themselves? It?s not best for the company that we do, but if they are our customers, its not up to us to tell them that they haven?t understood the value of a particular purchasing decision.
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Ideally, there is joint participation in the decisions made between stakeholders and procurement when purchasing, for example the decision whether to outsource a service is driven by the expertise of procurement professional. It?s not clear that that can be achieved by establishing a customer/provider relationship.
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Points both ways, but I think the no argument has the edge. The term ?customers? indicates that there is a separation between stakeholders internally; they are not our customers?we need to work with them, not for them to get the job done effectively.
The Chartered Quality institute has this to say: "Normally the customer is external to the
organisation?to interpret the term customer as either internal or external implies that the internal customer has the same characteristics as an external customer and this is simply not the case."
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It has always been that customers are external to the organisation and a key stakeholder to procurement, why complicate matters by suggesting that our internal stakeholders are anything other than that?