Put Procurement in Its Rightful Place at the Heart of Your Business
After decades of back-office anonymity, procurement is finally having its day. The most successful businesses have come to recognise procurement's power to unlock value, drive innovation and help achieve strategic goals. But, if your organisation has yet to fully harness the potential of its procurement experts – here's how you can propel your team, and hence your business, ahead of the curve.
Procurement as a strategic partner
Operating a siloed procurement team, which is primarily viewed as an administrative rather than a strategic department, means missing out on a host of performance advantages. The benefits of embedding procurement insight and input across your business – with members of the procurement team consulting with other functions to help steer decisions and boost efficiencies is huge.
Consider, for instance, how a procurement specialist might be able to advise on the most effective ways of streamlining a supply chain to speed up the development of products and services and get them to market faster. Alternatively, they might work with sales colleagues, to gain a better understanding of how to help the business satisfy customer expectations by tailoring its purchasing behaviour accordingly.
On the sustainability front, procurement should be wedded to the marketing/CSR team. A total 84% of UK CEOs are engaged with the sustainability function of the business, while, according to Deloitte's 2019 Global Chief Procurement Officer Survey, just 43% of CPOs see managing corporate social responsibility as a top area of focus. Procurement is central to business sustainability efforts – the decisions made here can bring a company's CSR promises to life, ensure compliance and limit reputational risk.
Partnering closely with the operations unit, procurement will also be able to advise on building efficiencies and innovation throughout the day-to-day running of the business by investing in leading technologies. The scope for collaborative working is broad and the benefits are clear. And, consequently, market leading organisations are adjusting the role of procurement withing their companies. A recent report by business intelligence consultancy, The Hackett Group, found that 77% of top performing companies see procurement as experts or valued business partners.
Enablers not gatekeepers
So, why is it that procurement teams still seem to be suffering an image crisis when it comes to the way they are perceived? In the same Hackett Group survey, 74% of stakeholders feel procurement in their organisation consists of gatekeepers or administrators. And procurement's biggest failing as a function is a perceived inability to communicate effectively.
Businesses that neglect to address this misperception and don't consider whether their procurement team has the tools it needs to communicate strategic procurement in action are missing out.
By letting your procurement experts shine a spotlight on their activity, you can underline the importance they play in moving your business towards its goals.
Tell your procurement success story
It's here that data analytics and visualisation tools really come to the fore. The latest spend analytics offerings enable procurement teams not only to gather and analyse data to establish what happened, but also to understand the why and visualise the story of how to improve in a highly compelling way.
Anyone can have access to applications which surface insights in simple, but informative, graphs and charts. This makes it easy for the team to identify trends or patterns, and use this information to inform everyday decisions, as well as the larger, more impactful ones. It also means they have a ready-made, real-time dashboards to demonstrate, clearly and effectively, how procurement can and is making a difference to strategic success.
These tools can help overcome the perception that procurement professionals are poor communicators. But they also provide powerful, easy to digest insight, on an internal and external basis - the value of being able to convey a simple and clear story at a board meeting, on your website or at an employee engagement event is huge.
Procurement teams are the vanguard of driving strategic value from supply chains. The gatekeepers of old are giving way to a new breed of collaborative innovators, finding better ways for businesses to adapt their buying habits to their advantage. They need to be championed in this regard, but they also need the tools and technology to help them achieve their goals and showcase how they're doing it.
Ian Yates – Director, Barcanet
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