Four Quick Ways For Small Businesses To Power Up Their Procurement

We welcome this advisory post from Eleanor Matthews, Co-Founder at WorkFutures.

The rise of the procurement team’s profile in industry has been well documented, with teams being told to embrace disruption and new ways of working. In a world of ‘always on’, hyper-connected commerce, procurement is playing a much bigger role than it might have typically done in the past. And that’s not where the change ends.Not only is the role of procurement becoming more strategic, but the way sourcing happens is also changing as it becomes dominated by the use of technology, with supply chains being enhanced by automation, bots and AI.

According to Gartner, by 2021, 55% of technology procurement staff will require additional business, digital and analytical skills to realise business innovation and growth. But how does the procurement function go from influencing purchasing decisions to influencing business decisions, particularly in a small organisation?

Here are just four tips small business procurement teams might want to consider to optimise the value their department can bring to the broader business:

Shine: Just because you’re small doesn’t mean you’re not special – and good procurement people will find the angle to make their company look like a desirable customer. Ask yourself -- Are you well networked? A go-to brand in your space? First movers? Environmental pioneers? Minority-owned? Procurement is, in part, a sales job, and finding out what niche you can occupy to help your suppliers look good, access new markets or establish new propositions, will help you punch above your weight in terms of getting supplier attention.

Automate: Like a lot of other functions, procurement is a combination of admin and strategic work and that admin work uses time and resources that could be better applied elsewhere. Admin should be automated ruthlessly. Even if you are not at a scale that can justify investment in an ERP, there are cloud solutions available at lower cost with much of the functionality you will need to introduce workflows and pre-defined processes. Robotic Process Automation (RPA) tools are not expensive and are designed to be easy to configure to perform routine, rules-based tasks instead of one of your valuable human workers. There are even lighter-weight automation solutions such as IFTTT (If This, Then That), which are designed to automate the parts of your job that take time and focus without adding value.

Collaborate: Find out whether there are opportunities to join forces with other small firms in your market or geographic area. In some industries there are buyers’ clubs which consolidate demand to procure goods and services. On the other hand, there are companies that specialise in sourcing specific categories such as packaging or utilities and partnering with them can give cost benefits as well as specialist market insight that may not exist in smaller procurement team.

Manage: The real value from procurement is not always in creating spot deals and driving the lowest possible price, it is in forging long-term relationships and managing them strategically over time to deliver maximum value on both sides. People buy from people and for the procurement team, there is a chance to understand who your contact in each of your largest suppliers is, what their objectives are and how they are incentivised. There are dividends in figuring out what you can give for free that will be of maximum value for them and their organisation, and what they can offer in return that will be of value to you and your organisation. This might be as simple as providing references to support future sales, or personal feedback at review time.

With nearly half (48%) of businesses saying they ended up implementing procurement reactively in response to a negative situation compared to 31% who said that it was a positive and proactive step forward, it’s time for procurement to up its game. And this is no less vital for SMEs, than it is for large organisations, with procurement serving a critical role in helping forge new business relationships to unlock top-line growth, and then managing those relationships efficiently and effectively to reduce costs, keep control of spend and eradicate intensive labour processes.

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