Procurement Orchestrates Overall Business Productivity

Spend Matters welcomes this guest article by Vroozi.

As Spend Matters and Vroozi wrote in their jointly produced research paper Declaration of the New Purchasing: A Buying Manifesto:

Article 16: Procurement will center on orchestration rather than the playing of a single instrument, supporting people in how they work and provisioning the external in concert.

Procurement will direct rather than play a “solo” role when it is most successful. It will filter information from all sources and help the business (and individual users) to make the best possible decisions. Think of procurement as a 2-way filter that provisions information from both supply markets (i.e., the outside world) and the business (i.e., the internal) and helps both groups to make the best decisions, and in the case of suppliers, to put their best possible foot forward based on access to new levels of information.

For years, the rest of the organization has only heard one tune come out of procurement: “getting things at less cost.” Sure, it’s a very good tune and an important part of procurement, but it isn’t the only thing procurement professionals and solutions are capable of. With increased integrations and insights, procurement will serve as a business maestro guiding and leading the organization as a whole.

As the article mentions, procurement can and should provision information from and provide insights to both internal and external teams. Here are some ways e-procurement will evolve to help all areas of the business:

• Internal Markets: Through greater spend and catalog visibility, the business itself will be able to make smarter decisions regarding budgets, contracts, spend management and other vital business operations.

• External Markets: By providing suppliers and other outside organizations with greater insight into your business goals, purchasing needs and the overall marketplace, suppliers can use the increased information to provide better quotes, contracts and help deliver on a more productive timeline.

While the potential of procurement to act as the company’s orchestrator shouldn’t be doubted by anyone in the procurement industry, it may be more difficult to convince other departments that have seen procurement as a solo instrument for so long. Procurement professionals should work to provide reports that other departments will find especially useful and getting these reports in front of key decision makers.

Another way to ensure wider use of procurement by the organization as a whole is to make it more accessible. With mobile procurement, any business user can easily gain access to reports and insights that will help them make the best decisions.

E-procurement solutions that offer supplier relationship management are particularly important for managing the external influences on your businesses procurement productivity. While your internal departments may be motivated to see improvements, it will be more difficult to share your insights with external markets and to demonstrate how they can benefit from the information, too. Guiding them with supplier relationship management software will help the procurement department organize and optimize these external factors.

As organizations gain access to more information, the departments and solutions that become most vital to the organization will be the ones that can filter this information from the variety of sources and provide the business with relevant, actionable analytics. Procurement has the potential to be that solution.