Procurement teams…those are the people who find an organization’s suppliers, right? If you’ve adopted this sort of limited view about procurement (or are surrounded by people who have), you’re (or they’re) gravely underestimating the impact of these teams. The procurement planning processes themselves and the people who are responsible for implementing them, can affect almost all organizational departments directly or indirectly — which is why its role in any business is critical.
So how can you ensure that your procurement processes boost organizational value for your company? Consider some of the following tips:
1. Review your current procurement process
“But we’ve always done it this way.” It’s a familiar refrain, particularly when an organization has reached a certain level of success. Complacency is not an attribute that should be nurtured, however. Indeed, reviewing processes is a critical first step in streamlining the workflow of your procurement team. Doing so will drive new efficiencies, which will ultimately have a positive impact across your entire organization. But first, you have to be willing to conduct an honest assessment about current processes and protocols.
Not motivated to dive in? Remember: beyond obtaining goods and services, procurement teams are responsible for sifting through — and engaging with — suppliers that could potentially become long-term partners of your business. These partners have to align with the big picture goals of the entire organization and should share the complementary priorities and values. Given the strategic importance of this alignment, you can hopefully use the high-stakes nature of this undertaking to motivate yourself to see if the existing processes supports this vision and then amending them if they don’t.
2. Focus on increasing employee skills through training
Continuing training and development of employees is one of the leading factors that contribute to an organization’s success. Yet, in a survey conducted by Middlesex University Institute, 74% of the research subjects felt that they weren’t able to achieve their full potential in the workplace due to limited development opportunities.
This statistic presents a huge opportunity — one that we’ve empirically witnessed in procurement — in that new technology has been adopted to help employees learn new methods to improve their job performance. So much of our attention is devoted to procurement tools. (And this makes sense because we’re in the business of developing procurement tools!) However, to optimize the value of the tools, procurement professionals should be well equipped to use them. Distance learning, on-demand training, and more have created unprecedented access training.
3. Leverage an eSourcing platform
Leveraging an eSourcing platform can give your procurement team more transparency and visibility regarding potential suppliers. It should make it easier for procurement teams to acquire a better understanding of what each supplier can bring to the table; as well as identify specific qualities that will allow them to see if they are a great fit for the organization.
Procurement teams are lauded for their ability to provide cost savings for companies as they source the goods and/or services required by their organizations. However, the goal isn’t necessarily to find the lowest price, but to optimize for highest value, a calculation that undoubtedly includes price. A robust eSourcing platform will help disentangle the qualitative and quantitative data, enabling procurement to select the suppliers that provide the best overall value in light of the selection criteria. The result? Strategic sourcing replaces tactical purchasing.
4. Cultivate good supplier relationships
If your organization is large enough to have a procurement team, then the success of the organization will be significantly impacted by the quality of its suppliers. In addition to maintaining active relationships, procurement teams are expected to have a network of qualified suppliers to which they send out bid requests when the need arises. Granted, you can simply seek out new suppliers when a new project or requirement comes along, but that can take a lot of time and effort. Essentially, doing so will require you to start over from scratch each time. Such delays from the procurement team’s side could cause a domino effect across the whole organization.
Similarly, once the people on a procurement team are engaged with a supplier, it’s incumbent on them to be an active participant in the relationship. Be sure to treat your suppliers fairly and conduct business with the utmost professionalism.
Keep these tips in mind if you want to improve your procurement team’s effectiveness. Remember, it’s not just about saving money or about putting out the current fire. Effective sourcing practices can have a positive chain reaction on your entire organization. So take a long view, tighten your processes, and get set up for success.
Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your business operations. Get in touch with us today.