Procurement impacts teams

How the Purchasing Process Impacts Teams Outside of Procurement

Even in organizations that have procurement departments and a formalized purchasing process, the ramifications of any purchase primarily impacts other internal stakeholders. Indeed, the stakeholders are users of the products or services and are left to deal with the consequences of sourcing decisions. When the products or services do not properly align with their business goals, it can be costly.

Many organizations are focused on making sure that they don’t overpay, but in the long run, the lowest-cost vendor might not be the right vendor. In fact, choosing the wrong vendor can, in some cases, reduce top-line revenue and effectively negate any savings attributable to the sourcing process.

Historically, sourcing and procurement were viewed as a back-end operational functions. However, this has changed more recently with these processes being viewed in a more strategic light. When it comes to forward-thinking organizations, procurement now has a seat at the executive table, helping to maximize efficiency and cost savings. While this constitutes significant progress, it isn’t yet pervasive. In many organizations, there still remains a disconnect between those who are purchasing the products or services and those who actually use them. 

Procurement impacts teams

Good procurement practices deliver smiles!

The costs associated with a bad purchasing process flow show up in places beyond the balance sheet; stakeholders who are saddled with the consequences of a bad process can grow frustrated or lose motivation. And even the best employees can have their performance undermined if they aren’t given the right products or services to work with.

Winning Influence of Key Stakeholders

By engaging a cross-functional team in the purchasing process, you’ll have the best people assembled to handle issues and concerns that can affect the entire organization. Team members can come from different areas such as IT, marketing, sales, R&D, administration and finance. It is critical for organizations to identify key stakeholders—regardless of departmental affiliation—who can offer informed opinions and have “skin in the game” as it relates to purchasing outcomes.

As stakeholders start to participate in the sourcing processes, they become more invested in the process. Engagement with teams outside of procurement increases transparency and internal collaboration, which ultimately leads to organizations finding more efficient and innovative solutions that benefit all parties. These benefits include:

  • Deeper understanding of requirements
  • A better view into the ramifications of the decision, including identifying what other (especially non-obvious) teams will be impacted by the purchasing decision
  • Ability to leverage more subject matter expertise in the evaluation/sourcing process
  • Better outcomes and improved ROI

Empowering Stakeholders Through Technology

Overall, increasing stakeholder engagement in your purchasing process improves the quality of evaluations and ultimately drives better ROI. However, ensuring simple and straightforward interactions with internal stakeholders and external suppliers requires the right technology. Technology and automation play critical roles in ensuring that your process can scale as your organization grows and its requirements expand.

Engaging a cross-functional team will drive business success, but how will you collaborate with all the different stakeholders in your organization? You need to have the proper tools in place. The right solution not only drives engagement but increases accountability and transparency for purchasing departments. Vendorful’s RFP management software allows you to solicit input regarding requirements, leverage subject matter experts, open up the sourcing process to the stakeholders who will be impacted, surface discrepancies in the evaluation, and build consensus.

Are you interested finding the right solution to help you streamline your purchasing process? Sign up for Vendorful’s online CRM software free trial to see how an RFP management solution can improve your sourcing process!

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  1. […] Given the stakes, why don’t all organizations view sourcing as a foundational component? Companies are motivated to focus on selling rather than buying. The latter is often viewed as a necessary evil, rather than an area that is core to the business. Forward-thinking companies create and cultivate “strategic sourcing” teams and initiatives. However, those organizations that choose to wave away procurement considerations do so at their own peril. Indeed, if these companies are able to survive long enough to scale, they often come to realize that their purchasing needs to be radically transformed. The cost to do this in a large organization can be significant. The cost of not doing this in a large organization is typically much larger. While it may seem unnatural for a small, but growing business to invest in creating a smart sourcing process, the dividends these companies can reap down the road makes for a compelling ROI story. […]

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