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A crew member inspects the intake of an A-7E Corsair II aircraft

5 Steps to Transform Your Procurement Intake Process

Procurement intake is typically the first interaction a stakeholder has with Procurement in your organization. If the intake process is confusing, opaque, and slow, it is difficult to undo that bad first impression. They may then try to circumvent Procurement, increasing maverick spend, reducing spend under management, and blunting Procurement’s impact.

To avoid such problems, intake processes should be quick and straightforward for both Procurement and its internal customers. Automating your intake flow can turn a cumbersome and time-consuming process into an efficient, streamlined operation. In this blog post, we’ll be discussing what an intake process is, the benefits of automating the process, and a step-by-step guide to transforming a difficult process people are obligated to follow into something easy that people will want to follow.

What is a Procurement Intake Process?

Procurement intake is the process by which an organization manages a new purchase request. It begins with an employee raising their hand and saying, “I need to buy something.” It could be something inexpensive or something complex, even within a single category. For example, “I need to get across town for a meeting” and “I need to arrange for the entire global sales team to get to an offsite in Fiji” would both fall under “travel”, though they differ radically in complexity and cost.

A huge part of the intake process is directing the requester down the right path for the specific product or service. To get across town you might want to automatically direct the requester to a car service they can book with their corporate card, and for the offsite in Fiji there would probably be addition information gathering, approvals, and a formal quoting process using a preferred travel agency.

Digitizing this process can help streamline the entire operation. It eliminates frustration by right-sizing the process to the purchase. It also reduces manual labor and reduces errors due to manual data entry.

Step-by-Step Guide to Digitizing Procurement Intake

When digitizing your purchase intake process, there are several steps you should follow in order to maximize efficiency and accuracy. First, create an automated workflow that will move each request through its respective stages quickly and easily. This can include setting up reminders for team members regarding approvals or deadlines for fulfillment. Additionally, you should set up templates for all the information required at each step of the approval and execution process. Then, create a standard and easy way for requesters to submit that information so that other stakeholders in the process don’t have to search through multiple emails or documents to find what they need. Finally, ensure seamless handoff at each stage of the process – from initial submission to review to approval to quoting to execution and fulfillment.

1. Automate the process

Automating your purchase request flow will also allow you to reduce costs associated with manual labor such as data entry or paperwork processing. Additionally, automation will increase accuracy by eliminating errors caused by manual entry or miscommunication between team members. Furthermore, automation allows you to move requests along more quickly since there is less reliance on manual processes like emailing back and forth or waiting on signatures from vendors or other team members.

2. Make it easy to submit and track a request

People outside of Procurement won’t interact with Procurement systems frequently. You can’t ask them to remember every step of the process – you need to make it so simple that it’s impossible to get it wrong. The best way to that is to make sure they have access to the intake process from the systems they use every day: team chat, email, an intranet page, etc.

It’s also important to make sure your team knows where they can get any questions answered about their requests or any other related topics quickly and easily. By creating a centralized platform where team members can ask questions or provide updates on their requests without having to search through multiple emails or documents, you’ll be able to save time and keep everyone informed at all times about any changes in the status of their requests.

3. Ensure seamless handoff from step to step

Any procurement intake solution should also help ensure a seamless handoff between teams, departments and vendors throughout the entire process. Intake should automatically hand off to approvers if needed, then hand off to Procurement, then automatically roll into RFX/punchout/etc. as appropriate, then hand off to vendor intake, contract, and so on until the whole process is complete.

If your digitization efforts require offline work or swivel-chair integrations at any point in the chain it will negatively affect user adoption and acceptance.

Benefits of Digitizing Procurement Intake

Digitizing the procurement intake process can help ensure that all relevant information is collected on time and that any required approvals are obtained quickly, minimizing delays or disruptions to the request flow.

Having automated reminders and alerts in place natively to notify team members when requests are coming due or when invoices need to be paid, you can help ensure that everyone is on the same page as to what needs to happen at each step.

Overall, automating your purchase intake flow will save you time and money by streamlining processes and eliminating manual labor associated with data entry.

Conclusion

Automating your purchase intake process offers numerous advantages over traditional methods including cost savings due to reduced manpower needed on administrative tasks; quicker response times; improved accuracy due to fewer chances of human error; increased visibility into what stage each intake request is at; centralizing communication within teams; promoting preferred vendors who may offer better prices than competitors; and saving time overall when fulfilling orders quickly without sacrificing quality or service levels expected by customers purchasing products from them directly online or through third parties such as Amazon Marketplace sellers etc.

These are just a few of the many ways that businesses can use automation technology to efficiently automate their entire procurement process while providing excellent customer service at every step.

If your team isn’t taking advantage of intake automation yet, now is the time to start! Make intake management a priority and you’ll quickly see how it makes you an invaluable asset to your business’ success.

To find out why Gartner’s most recent Procurement Hype Cycle report named Vendorful as a Sample Vendor for Intake Management, book a meeting with us today!

Digital Procurement: 5 Principles for Effective Operation

Whether your organization is just building its procurement function, or it’s looking to revamp and modernize, it’s helpful to have a blueprint for building an effective digital-native procurement operation. Here are five principles to follow to meet your goals:

  1. Invest in training and development for procurement professionals. Everything starts with people. Investing in your team will help them stay up-to-date on the latest trends and best practices in the field, and can improve their skills, knowledge, and expertise. It can also help teams attract and retain top talent, and can support the overall success of the organization.
  2. Invest in the right tools and technologies, such as online platforms, marketplaces, and analytics. Digital procurement requires tools. These tools can help teams streamline their processes, automate routine tasks, and improve their visibility and control over the supply chain. And investing in technology to increase productivity is also an investment in people, and like we said in point 1, everything starts with people!
  3. Build strong relationships with suppliers. This can involve regular communication and collaboration, as well as establishing clear expectations and performance metrics. Strong supplier relationships can help teams negotiate better prices, improve delivery times, and reduce risks. Strong relationships can help ensure that you are a customer of choice, which will help you work through supply disruptions should they arise.
  4. Use data and analytics to inform decision-making. This can involve collecting and analyzing data on key performance metrics, such as cost savings, supplier performance, and on-time delivery, and using this information to identify trends, patterns, and opportunities for improvement.
  5. Develop and implement standard processes and procedures for managing the sourcing process. This can help teams ensure consistency, quality, and efficiency, and can reduce the risk of errors and misunderstandings. The best people, systems, relationships and data won’t help if you don’t actually use them!

Not only does effective digital procurement help you save money on the goods and services your business needs, but it can also help improve your relationships with suppliers and ensure that you always have the resources you need to keep your operations running smoothly. If you follow the five principles above you’ll be well on your way to building a successful procurement operation.

White House to Ensure Equity with New Initiatives

The Biden administration recently announced several new initiatives to expand contracting opportunities, particularly for small and disadvantaged businesses.

On Tuesday, the White House announced that in the fiscal year 2021, the federal government awarded small businesses $154.2 billion or 27.2% of total contract dollars—up $8 billion from the previous fiscal year.

The federal government exceeded its small business contracting goals for small disadvantaged and service-disabled veteran-owned businesses.

This summer, the U.S. Departments of Interior and Transportation will host events to provide information on technical and financial assistance opportunities for small, understaffed businesses.

The White House also announced that the Department of Transportation and the Small Business Administration would help expand access to capital for small, disadvantaged businesses by linking them with investment firms. The two agencies will hold business forums to match SBICs with disadvantaged businesses and broker discussions between companies and fund managers.

To ensure equitable procurement opportunities, the government is increasing the contracting goal for small disadvantaged businesses from 5 percent to 15 percent by 2025 and will change how companies are categorized.

Common Supplier Frustrations in Procurement

In 2022, CPOs are facing many challenges. We list the Top 3 as we see it.

diversity

The Largest Problems Every CPO Has In 2022

In 2022, CPOs are facing many challenges. We list the Top 3 as we see it.

What's out there, lurking in the fog?

The Critical Importance of Supplier Visibility

One of our users – let’s call her Anna – won the assignment to head up a new supplier diversity program at her company. She had authority to drive actions, budget to get things done, and clear targets for diverse supplier spend. She got to work.

There was one small problem. When Anna asked “what are we spending with diverse suppliers today?” the answer came back “we don’t know.” How can you know how far you have to go to reach your goal if you don’t know where you’re starting?

Anna’s story isn’t unique. Procurement teams increasingly face mandates beyond cost savings. These include Environmental, Social and Governance (ESG) goals, risk reduction, supplier innovation, performance optimization, compliance enforcement, and other complex tasks.

However, they also frequently deal with poor or non-existent tools for understanding their supply base. Even basic questions like “How much of our spend is currently allocated to diverse suppliers?” are hard to answer without a lengthy manual data collection process.

In order to meet these new mandates, Procurement teams need better visibility into the supplier base.

Benefits of improved supplier visibility

Organizations enjoy several benefits from improved supplier visibility:

  • A complete picture of supplier performance and supplier risk. This includes a holistic view of financial stability, ESG factors, country risk, customer churn, and other measures.
  • Alignment between performance, risk and spend. As a result procurement teams make informed recommendations about where to allocate business.
  • Better goal tracking. Teams can take the guesswork out of whether they are meeting their objectives and monitor data in real time.
  • Improved compliance. Breaking down internal silos ensures that compliance enforcement is a global process.

Problems that arise from poor supplier visibility

Conversely, major problems can arise when organizations lack sufficient visibility into their supplier base:

  • Poor visibility into supplier performance: Vendor performance assessments are manual – with intensive Excel and email data collection work – if they’re done at all. As a result, assessments are infrequent, incomplete, ad hoc, or all of the above.
  • Poor visibility into supplier risk: Vendor risk management is reactive rather than proactive. Therefore risk management frequently addresses problems after they happen, and mitigates risks on an ad hoc basis.
  • Decisions driven by intuition rather than data: Because procurement and supply chain teams lack supplier visibility, they’re also working with incomplete data sets. This leads to suboptimal decision making around spend allocation as it relates to performance and spend.
  • Siloed supplier relationship management: Because of the lack of a centralized system or repository for supplier information, procurement and supply chain teams often end up managing supplier relationships in silos. This leads to duplication of effort, inconsistency in approach, and communication breakdowns.
  • Inconsistent or nonexistent supplier compliance tracking: Without visibility into supplier performance and a shared understanding of contract terms, it’s difficult to track whether suppliers are meeting their contractual and regulatory obligations. That puts the organization at risk if critical suppliers are not adequately monitored.

The path to becoming a supplier visibility leader

There are three stages on the path to full supplier visibility, and they don’t all need to be done at once:

  1. Develop a shared source of truth about vendor relationships. This means creating a centralized database of supplier information that can be accessed by the whole Procurement team and key stakeholders outside of Procurement and Supply Chain.
  2. Analyze supplier performance on quantitative and qualitative measures across the organization. This will help identify areas where improvement is needed.
  3. Apply business intelligence to data collected in steps 1 and 2 to visualize supplier performance and risk. Simply stated, data captures what is happening right this second, whereas business intelligence uses historical data to make predictions on future trends and problems. Early detection of issues and trends can help you avoid them becoming troubles later.

Organizations need to have visibility into their suppliers in order to manage them effectively. Without visibility, procurement and supply chain teams will suffer from several critical problems.

Conversely. organizations that improve supplier visibility will be able to make better procurement decisions, improve goal tracking, and ensure compliance. Procurement and Supply Chain teams can no longer afford to suffer from poor visibility into their supplier base.

By taking these steps, organizations can begin to improve their supplier visibility and reap the many benefits that come with it.

Buried Treasure

Bain Gets It: Procurement is an Undiscovered Treasure

II was recently talking with someone who was frustrated that “most of the good articles on procurement strategy in business seem to have been written five to ten years ago.” And right on cue, I came across a piece by some partners at Bain entitled “Unearthing the Hidden Treasure of Procurement.” I strongly recommend that you read the article. It’s not long and you will get a significant return on your invested time. However, if you’re inclined towards bullet points, then you can take advantage of some of the key highlights I’ve identified.

Spend is a Big Issue

The largest single expense category for most firms? External purchasing, which averages a whopping 43% of total costs.

Procurement Savings Potential

Graph from https://www.bain.com/insights/unearthing-hidden-treasure-of-procurement/

Good Procurement Works Wonders

Bain has found the top procurement organizations can reduce an organization’s cost base by 8%-12% on average and then add 2%-3% annual savings on top of that.

Top Companies Buy Better and Spend Better

The two areas that get immediate focus when savings mandates are handed down are improved supplier selection and better price negotiation. Companies multiply their results when they take a step back, however, and rationalize their desired spend before diving into the sourcing process.

Close the Loop on Spending

Procurement manages spending on the category level. Stakeholders in business units manage their budgets across categories. The best companies make sure that category-level savings inform the current year’s budget to ensure that hard-won savings are not ill spent elsewhere.

People, Process, and Tools

Leading organizations have strong capabilities in all these areas: a capable team, running smart processes, empowered by specialized tools.

There’s a ton of great information in this piece and it’s densely packed. So if you were willing to spend the time reading this far, I’ll reiterate my previous suggestion that you read the article in its entirety.

Team: Hands In!

4 Ways to Maximize Engagement with the Procurement Team

Companies with an effective procurement department in place understand just how critical the process is to business.

However, an established system doesn’t guarantee engagement. In fact, according to a Deloitte study, “Internally, engagement across the business remains an area of focus but, for many, a development point.” 

To date, many internal employees try to avoid going through the proper procurement channels. Some key departments feel that going through a standardized procurement system slows down the vendor search and evaluation process. Others think that it adds more bureaucracy to the procurement process, which doesn’t lend value to their work processes.

These reasons underscore the need for procurement professionals to find a way to proactively engage their stakeholders and increase purchasing efficiencies. Here are 4 ways you can do that.

 1. Focus on relationship building

 According to Chief Procurement Officers (CPOs) in a Deloitte study, 74% of CPOs cite “cost savings as the primary driver for performance measurement.” However, while cost savings is a critical driving force for following a systematic procurement process, highlighting another important advantage may prove to be as effective; thereby, helping to build better professional relationships with internal stakeholders.

When companies focus on cost efficiencies alone, it makes the process seem very transactional. Fusing this benefit with other long-term business advantages could provide stakeholders a valued overview of what the procurement department does. 

2. Empower efficiency without forcing policy

Often, established procurement processes are accompanied by new policies that demand employees to comply with the new system.

Instead of pushing for compliance by enforcing the need to comply with set policies, highlight the potential for improved efficiencies. Start by asking employees what they need, understand their challenges, and then present solutions your procurement team can help provide.  

For example, you could highlight how much time automating the procurement process can save for their department, and how your procurement team can assist with writing engaging RFP bids.

3. Make an effort to understand individual department needs

Even with standard processes, there is really no one-size-fits-all approach to efficient procurement. Procurement professionals should understand individual department needs to give them a tailored approach that will be supported by procurement systems your team has put in place.

For example, if you want to engage sales, be sure to reach out to the sales team and gather information about company products and their competition. If you want to learn more about marketing needs, inquire regarding how their department approaches branding and company positioning. For operations, find out what internal processes need additional support.

Knowing more about how your company’s individual departments operate means your procurement team can offer better solutions to their sourcing needs. Ultimately, it helps align your own procurement goals with each department’s objectives.

4. Explore other areas of value

Again, cost reduction may be at the top of every department’s priority list. However, there are other ways that procurement teams can provide value.

For instance, procurement teams are very knowledgeable about market trends. Data gathered from your research could very well be used for more insightful decision making for marketing and sales departments.

Bottom line…

Successful procurement teams with great engagement rates not only use the knowledge of having the necessary processes in place, but they also make sure their stakeholders are using it.

To find out how automating key procurement processes can help boost engagement, schedule a demo of our vendor management services.

Improve your procurement process

4 Ways to Improve Procurement Processes and Boost Organizational Value

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 of 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 support this vision and then amending them if they don’t.

2. Focus on increasing employee skills through training

Continuing the 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 a strategic sourcing template for RFPs, RFIs, and RFQs 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 the 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 to 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.

Improve procurement team performance

5 Ways to Increase Your Procurement Team’s Performance

The role of traditional procurement teams is changing.

By definition, procurement experts are typically responsible for obtaining goods and services based on a company’s needs. However, these days, their role is expanding and they’re also in charge of staying on top of supply market trends and understanding how these can affect the business. Companies rely on them to use their expertise and insight to create new growth strategies and help them remain competitive. Procurement teams are also key players in business expansions with significant supply chain impact.

Given the importance of their role, it’s crucial that companies set their procurement team up to succeed. Here are five ways you can do just that:

  1. Be transparent

Be very clear about what you expect from your employees. This goes a long way towards getting the job done; especially for team members who juggle as many functions in the company as procurement professionals.

Procurement teams should know exactly what the company needs from them to ensure that they are focused on the right priorities. It helps to involve them in major company decisions as early in the process as is feasible so that their daily priorities don’t inadvertently drift too far from the company’s long-term strategic direction –.

  1. Provide constructive feedback

Employees rarely do well working in silos — this is especially true of procurement teams. They’re tasked to coordinate both with internal teams and clients, which means it’s especially critical for them to receive regular feedback from people they interact with.

Providing the team with constructive performance feedback lets them know exactly where they’re at and how well they are doing. It’s also a great way to let them know what areas of the job they can improve on.

  1. Give them incentives

Positive reinforcement is great. Giving your procurement team that extra push through incentive programs is essential to acknowledge that they’ve done a stellar job.

Proactively reward your team for a job well done. Try setting smaller annual goals that procurement teams can work on. Provide incentives when they successfully complete each objective. This will help them feel more accomplished and motivate them towards achieving the bigger, long-term company goals.

  1. Recognize individual expertise

Procurement teams succeed as a group. And within that group, there will be individual team members who will stand out for their specific areas of expertise. For example, one person may enjoy haggling directly with suppliers, while another may loathe it. Identify their particular areas of strength or what specific part of procurement interests them and leverage that as much as possible.

  1. Give them the tools to help get the job done faster

As the job of procurement continues to evolve your team now finds itself intricately involved in multiple aspects of business operations. Think of ways to ensure that they are able to efficiently do their jobs.

One way might be to streamline key aspects of the procurement process, such as writing effective marketing RFPs. eSourcing makes that process more transparent, promotes better adherence to best practices, and saves time for both your team members and your suppliers. Providing the tools to get the job done more efficiently shows your team that you are invested in their success.

If you want to enable eSourcing as a way to increase your procurement team’s performance, find out how Vendorful can help. Contact us today!