Are your stakeholders happy? How to improve stakeholder satisfaction

Unhappy customers?

Our 2024 Annual Procurement research, Stronger Together, shows that procurement teams are better at creating outcomes that are valued by their stakeholders than the popular discussion would indicate.

63% of respondents to our research indicated that their stakeholders are “somewhat happy” or “very happy” with the way that the procurement function works in their organisation.

Figure 2: 63% of procurement teams have happy stakeholders (N=60)

Then another quarter is neutral: neither happy nor unhappy. It is only a very small percentage of 12% of organisations where procurement does not deliver for stakeholders.

Diving a bit deeper, we found that the more established the procurement function is, meaning the higher the maturity of the function, the higher the satisfaction of the stakeholders. While 42% of stakeholders are happy with a relatively immature procurement function, 63% are happy with a medium maturity function and a whopping 94% of stakeholders are happy with the most mature functions. We suspect this is directly correlated with the fact that the higher the maturity levels, the better the understanding of their stakeholders and the deeper the relationships between the procurement team and its internal customers.

We know that there is a direct impact of stakeholder satisfaction on the overall effectiveness of procurement functions: Satisfied stakeholders are likely to be more cooperative and supportive, which can facilitate better procurement outcomes and drive further maturity improvements.

So, what are the key pain points that procurement needs to address in 2024 and 2025 to further improve stakeholder satisfaction?

Our research points at three improvements:

Define processes and guidance to get the most of existing suppliers. About one in two organisations say that Performance Management isn’t their strong suit. There is so much time put into the sourcing of a supplier, only to lose about 30% of value during the contract management stages. Often organisations struggle articulating useful KPIs or to enforce the ones they have in a way that creates better performance.

Improve your understanding and articulation of how procurement supports implementing the organisation’s strategy. Procurement teams, irrespective of the annual send they are looking after struggle aligning their own strategy with that of the wider organisation. Often too focuses on compliance, cost reduction or creating competitive tension, they miss the bigger picture: How can procurement support the wider organisation in what is most important: for example, profitability, revenue generation, innovation and sustainability.

Create an up to date list of all procurements coming up in the next 12 months. There aren’t many excuses here – if procurement has a list of all contracts that are in place, it should be easy to understand when which arrangement will expire and to plan backwards from there. Sure, there will be new requirements that go beyond the existing list of contracts, but through thorough and frequent stakeholder interactions, they should be easy to identify and add to the expiring contract register.

The good news is that 85% of the procurement teams we have surveyed, indicated that further improvements to their function are underway this financial year. This will further improve the stakeholder satisfaction and therefore the outcomes of procurement. Exciting times.