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Delivering Value Beyond Savings — Procurement’s Role in Times of Disruption

procurement's role

Deeply hit by the COVID-19 pandemic, companies are now exploring innovative ways to drive additional profits and increase revenue. Hard-hit sectors like manufacturing, entertainment, transportation and hospitality, to name a few, remain gripped by uncertainty. It may take a while, years in some cases, for companies in these industries to recover to pre-COVID levels.

Companies are now in a quest to redefine their business models. Finding cost-cutting technologies or tools to help drive sales, mitigate risks and maximize cashflow is now a greater priority for many. And for some organizations in this revised business scenario, it’s their lifeline.

Procurement plays a significant role here, not only for the result it can bring to the bottom line but also for the increasingly strategic role procurement teams are playing. Now is the time for procurement managers to redefine themselves — from buyers to strategic partners across the entire supply chain.

Let’s look at some of the ways procurement can help the organization achieve its goals.

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The Gift that Keeps on Giving — Procurement Education

It’s the holiday season and I’m sure we all feel the same way as we approach the New Year — relieved that the four numbers “2020” will soon no longer show up in our calendar.

With the joy that comes with the holidays and the thought of putting this year behind us, I know many of you that lead the procurement, supplier management and/or risk management functions of your organization are wondering how to reward your team to set them and your organization up for success in 2021.

Many of your organizations likely cut budgets this year, while some of your organizations may have extra spend sitting in the training budget since many in-person training and events were canceled this year. While we all love cool gadgets and gift cards and hope not to receive a dried up fruitcake, the best gift for your team should be special, meaningful and continue to reward year after year.

The perfect gift would show your team how much you appreciate them, while providing an opportunity to develop their skills. Certifications in strategic sourcing, supplier management, third-party risk management and intelligent process automation can bring you that win. Earning skills in these areas bring many benefits not only to the individuals who attain them, but also to the organizations that employ them. It also advances the profession in general along with the respect for those in that profession.

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Do I need a procurement strategy for next year? Try this 5-step assessment

procurement goals

Many procurement organizations see annual planning as a time to set savings goals and identify sourcing opportunities that will allow them to meet these goals. This is an understandable approach since it paves the way to understanding the coming year’s workload, which can in turn, inform budgets, resource needs and org structure.

However, rushing off to plan your savings pipeline without considering your company’s business goals can quickly get you out of synch with your stakeholders. Instead of jumping to the savings plan, it’s helpful to take a step back and assess what the business wants you to deliver and how you can meet those expectations. With this knowledge, you can set an intentional plan and strategic roadmap for the coming year.

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Is the problem that services spend is complex or simply that you have bad spend data?

When it comes to services spend, many organizations find it difficult to manage. CPO Innovation reports that “services spending can range from almost 50 to 80% of what firms buy from outside vendors.”

Just like any category of spend, especially indirect, it all goes back to the data. There’s the adage, “if you can't measure it, you can't manage it.” We know the goal of an organization is to have as much spend under management as possible — but if you don’t have good visibility into your spend, how can you expect to manage it properly?

In this post, we review the complexity of services spend, the importance of cleansing your spend data, and how doing so can help you manage not just your services spend better but all indirect spend.

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Digital Procurement balances business requirements to improve efficiencies 

tail spend

Coordinating the various needs of a business is a challenge, for small and large organizations alike. Whether you’re looking to improve your processes or meet projected targets, ensuring everyone in your business has what they need to function optimally can take up precious time and resources that hinder opportunities for more strategic projects and talent development.

Empowering teams to own their procurement processes through digital purchasing systems improves efficiencies while maintaining staff independence. By ensuring everyone in the organization has the items they need without inundating the procurement team with purchase requests, operational requirements are balanced in a way that improves business function and helps achieves goals.

Procurement teams need to go through internal processes of implementing digital change, while still streamlining processes to secure the resources and financial wellbeing for the broader organization. One way to do this is through online procurement, which provides substantial benefits that shouldn’t be overlooked. Following are a few tips on how using a centralized procurement function can improve your business.

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Three years down the line: How Amazon Business is revolutionizing procurement

Amazon Business UK Dave Brittain

In a nutshell, Amazon Business was created to make businesses’ lives easier by saving them time and money. It is essentially the convenience of an e-commerce site optimized for the needs of B2B businesses. It has various clever tools and features to help increase efficiency and improve productivity, and is expanding the use of machine learning to automate manual and time-consuming tasks, making processes more streamlined. In a short period of time, it has helped millions of companies in Europe reap the benefits of digital buying. Spend Matters talks to the head of Amazon Business UK.

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Hang on and hang in: The roller coaster won’t last forever

If the past two decades have taught us anything, it’s that the world is in a constant state of flux. We can’t afford to become complacent or too comfortable.

I often find that once the dust has settled and some time has elapsed, I look back at those “What else could go wrong?” moments and realize I’m now a more resilient person better equipped to confront the unknown. Each catastrophe pushes us and our organizations to be innovative and operate with tenacity.

The best we can do now is to prepare ourselves to come back stronger and smarter.

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Integrations for a truly connected technology ecosystem: A conversation with VNDLY’s Chief Technology Officer

As companies continue to adapt to the dramatic changes brought on by the global COVID-19 pandemic, one major shift sweeping the industry is a faster move toward creating technology ecosystems that increase the pace of digital transformation. Organizations that had long-term plans are speeding those up, and companies that were still undecided have chosen to act now.

These swift changes, in response to the unpredictable nature of today’s workforce needs, must be supported by technology that helps users effectively manage their extended workforces across their entire organizations. They may also require platforms that can share data with other systems, ensuring accuracy around all manner of contractor and traditional employee data.

When companies invest in large, sweeping platforms, like Workday, to manage company-wide departments and worker populations, they look for other platforms that integrate seamlessly and do not require engineering or maintenance provided by internal IT teams. Adopting those additional technologies that can integrate and become part of the ecosystem saves time and money, making the initial investment more valuable. For more insight into technology ecosystems and integrations, and specifically those between VNDLY and Workday, we talked with VNDLY’s Chief Technology Officer, Chuck Mobley.

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5 simple truths about category management

Category management may not be known as simple, but it doesn’t need to be complicated either. Whether you’re a procurement leader who has implemented category management or are thinking about it, here are five simple truths about category management.

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Why supplier financial health is vital to supply chain resilience 

healthcare

A financial health assessment helps determine how fiscally stable — and therefore how reliable — a supplier is, which ensures better supply chain resilience. By identifying risky suppliers, you can avoid violated contracts, credit damage and project delays. Here are some of the key reasons it’s critical to perform financial health assessments with contractors.

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Can your company benefit from procurement consulting?

Capgemini IBX Business Network

Is it worth it to pay for a procurement consultant? ProcureAbility argues that hiring a procurement consultant or consulting agency can help a company save time, find perspective and gain expertise in their procurement efforts.

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Supply chain finance: 3 core components for a best-in-class SCF solution

The value of a supply chain finance (SCF) solution has never been clearer than in recent months, with many companies opting to boost the resilience of their supply chains and support their suppliers in volatile trading conditions.

But while SCF has much to offer, it’s important to remember that not all solutions are made equal. With that in mind, here are three components that buyers should focus on when setting out to implement a best-in-class SCF solution: