Procurement is rapidly moving away from what was once a personality-centric function where senior procurement professionals did a lot of the work themselves, did a lot of the work manually, and did a lot of the work using mainly the knowledge they had amassed from years in the profession.
But much has changed over the last few years. Today, the senior procurement leader is becoming much more focused on establishing standardized processes that enable and enforce good procurement practices, and on deploying technology tools that guide people on their team and throughout the wider organization through those processes.
The pressures causing this change are numerous, including:
- A shortage of procurement capacity makes it imperative that the team be freed up from routine administrative work and be given the tools to ‘do more with less’ in critical value-added functions like strategic sourcing, beyond just the top few categories to lower profile or higher risk categories.
- C-level executives want ‘on-time procurement’, meaning faster fulfillment of the organization’s needs for any and all categories whilst obtaining them in a best-value manner and in compliance with corporate policies.
- Younger tech-savvy staff coming into the procurement profession expect access to technology tools and information they need to do their jobs. And they need it, because they simply have not yet built up the level of talent (i.e. experience and knowledge) to do it on their own.
- Staff turnover in Procurement and throughout the workforce exacerbates all these issues – process speed, compliance, capacity and talent. When an experienced, progressive Procurement staff member leaves, it can disrupt current processes or even threaten business continuity. Procurement leaders need to be able to put new team members to work quickly with the confidence they will perform their functions correctly. The organization needs to bring new employees into the purchasing process as soon as they come on board.
Addressing these issues is only feasible with well-constructed technology tools that guide people through the right procedure in a fast, efficient and consistent manner.
More mature organizations are recognizing that to address these ‘need for speed’ and capacity issues, they must enable people throughout the organization to do effective procurement – not just the Procurement team. This again takes technology frameworks along with well-thought-out policies and procedures. Some of the tools organizations are putting in place to make this a reality include:
- Greater supplier content available within the P2P system so people can quickly find and purchase catalog-based items from qualified suppliers on their own.
- ‘Quick quote’ processes built into the P2P system that enable departments to request and compare quotes from pre-qualified suppliers for routine services.
- Pre-established step-by-step sourcing process and RFX templates that enable operational departments to largely self-perform even more strategic purchases in certain categories in a standardized, transparent manner that effectively involves Procurement at the right points.
Forward-looking procurement leaders are clearly focused on enabling a more standardized, collaborative and efficient approach to the entire process of purchasing goods and services – within the Procurement team, throughout the organization, and across a wider range of categories. Those taking this approach are seeing a steady increase in the percentage of spend under management and the benefits that come with it.
The Procure to Pay Process: Explained - The secret to effective, agile, automated purchasing