When it comes to getting strategic procurement correct, there’s a long way to go...that’s the clear verdict of the vast majority of respondents in our Joining Forces Survey
Fewer than 25% of companies feel they are close to conquering this challenge, while three quarters can see sizable opportunities to improve ahead of them.
But it’s tantalising to know the savings and other rewards are out there, you just need help to reach them.
Why does this matter?
The cost of the procurement process goes directly to the bottom-line.
Besides missing out on substantial savings from better supplier agreements, a sub-optimum strategic procurement process wastes human resources throughout the organisation, from the Procurement team to Accounts Payable and Operating departments.
Time spent maintaining redundant data, running sourcing events the hard way, answering supplier enquiries and chasing all types of information can result in wasted resource that directly reduces profitability.
The more time your Procurement team can spend on the right activities, the more you can save.
The primary job of your Procurement team is to help your Operating departments get what they need at the lowest cost. They do this by identifying good suppliers
, negotiating favourable agreements
, monitoring supplier performance
, and maintaining strong supplier relationships
But if the right information is not readily available to them, the reality may be that they spend far more of their time ‘preparing’ to do these things than actually doing them.
A lot of time may also be spent just answering employee and supplier questions because the contract and other information they do have is not easily accessible by others. Skilled Procurement professionals are often required to spend much of their time as ‘buyers’ executing routine purchase transactions just because they are the only ones with supplier and contract information.
All these activities just take time away from your Procurement team’s main job.
Strategic procurement initiatives start out with the best intentions but often fail to deliver their full potential as they can be too complex to be solved by paper-based systems, traditional approaches and manual efforts. Something extra is clearly required.