Procurement for All. Warm and Fuzzy. Or Feeling Left Cold.
For some, procurement is one dimensional. It’s a cold encounter with a team of people who just want to cut costs. That’s procurement isn’t it. Little chemistry, cutting costs, just to save money.
In part that’s true. There will often be a tactical and immediate requirement to increase cash-flow and so cutting costs can help do that. We’ve witnessed that as a result of the pandemic.
But procurement done well can maximise value for any business or organisation beyond the tactical. It can and should be business transforming. It doesn’t need to be a cold encounter (it can be) but rather it can also establish a warm and fuzzy experience and make a difference that matters. In effect it can help build value and sustainable profitable growth.
It can provide valuable analysis, benchmarking, and auditing of your business or organisational spend. If you’re paying £2 and the rest of the market, including your competitors are paying £1.50, wouldn’t you want to know and change that. And with costs and prices on the increase post pandemic, you’ll really want to know.
It can show you in detail where you make the most profit and cash and how to improve your margin. That means you get to focus on those products and services producing value in the business;
It can provide an audit, gap analysis and recommendation for tools and technologies that your organisation is currently using or should be using and so works well with sales, marketing, finance and product teams;
It can help you create a business case for investing, identifying and launching new products and services in line with your business and customer goals. So procurement can help with investment and product choices and customer & market analysis;
It can support your purchasing plans by identifying, tendering, negotiating and managing new suppliers, partners and contracts, to ensure you get the best possible value for your spend and over the long term
Strangely too perhaps, you might think, that whilst on the surface it appears all about cost management, procurement can also help identify new revenue streams, new commercial routes to market. How? Because procurement can play a key strategic role in the business through the knowledge, insight and intelligence it has accumulated of customers, products, services and suppliers which can be aligned with commercial goals and objectives.
Procurement can and should be business transforming and as we emerge from the pandemic, it has the opportunity to integrate itself into any organisation as a valuable business partner, providing a blend of tactical and strategic solutions to maximise that value.
One last thought. As the pressure grows on businesses and organisations to fulfil their Net Zero obligations, the role of procurement in sustainability will be key.
Most businesses and organisations are now aware of the significant impact of carbon emissions on climate change and the need to put in place policies and actions to reduce their own carbon footprint. However, understandably, many don’t know where or how to start.
But by placing sustainability with procurement at the heart of the organisation, it really can make a difference: improve the bottom line, enhance business reputation, increase customers, inspire employees, reduce risk and build competitiveness, for the Net Zero Age.
