Forging a successful Procurement strategy – A Bluebook for the future of procurement

Abstract

Introduction

Even after years of implementing ERP and different purchasing systems, the procurement processes of different organizations remain expensive, inaccurate, and paper-based. Organizations keep searching for opportunities to drive higher cost-savings and enhance process efficiency. Robust savings can be achieved and process efficiency can be enhanced by focusing on improving purchase data, processes, and analysis.

This whitepaper analyzes factors that can help achieve the next level of procurement and overcome procurement challenges, the evolution of procurement’s value proposition, and future opportunities that can lead to the achievement of the aforementioned goals.

Problem Statement

To achieve the next state of procurement while introducing a formal change management process to embed changed procurement processes, and frame a holistic picture of the data on spending.

This whitepaper proposes answers for the following questions:

• What are the different ways to overcome procurement obstacles and challenges?
• How can stakeholder engagement be enhanced?
• How has procurement’s value proposition evolved?
• What are the different types of opportunities that can usher in the next level of procurement?
• How to plan for the future?

Achieving Enhanced Efficiency in Procurement Systems

Procurement teams in most organizations have tried their best to derive price savings from suppliers, wherever possible. With the growth of supply chain globalization in recent years, there is ample scope to make local differences in the procurement processes more visible.

For B2B procurement to work, the accuracy and quality of the data entered into the system, and the ability to streamline the data among different stakeholders, such as the end users, procurement professionals, and suppliers, is of significance due to the following reasons:-

Overcoming Procurement Obstacles and Challenges

The Procurement Order is the most important document for procurement teams. Any problem concerning the PO data quality tends to balloon into a more critical issue and can have an adverse impact on audits and financial decisions, resulting in reputational risk. In many cases, procurement transformations fail due to the underestimation of the significance of change management by the organization.

The primary constraints on change management include paucity of resources, limited skill-sets, and the the procurement teams’ inability to influence purchasing processes and decisions.

It is imperative for procurement professionals to have access to information, in order to show the business how important their function can be, the widespread implications of inaccurate data entering the system, and how strategic sourcing can deliver a competitive advantage to the organization.

Improving Stakeholder Engagement

Indepth spend intelligence will provide procurement professionals the  intelligence required for engaging effectively with the rest of the organization. This will enable procurement team to identify useful information such as the following:

Evolution of Procurement’s Value Proposition

The supply management mindset needs to undergo a radical change. Many business leaders aspire to enhance profitability by reducing costs. However, in order to achieve this, they must reshape supplier relationships and align their supply chain using a more progressive strategy. Some important strategies for achieving Procurement’s Value Proposition have been outlined below:-

Procurement Action Plan

Procurement teams must view things from a different perspective in order to achieve optimum efficiency and overcome obstacles. Things like data accuracy and keeping a repository of procurement transformation data must be available to procurement professionals in order to effect change.

Some strategic opportunities that can be looked into are tax-oriented supply chain design, smart contract management, urban mining, and so on. From a technological standpoint, enablers and opportunities include End-to-End Procurement Solutions, Procurement Appstore, Automated Reporting, Predictive Procurement Systems, and so on.

Conclusion

In the coming years, organizations should focus on benefitting from all the aforementioned opportunities, so that they can optimize procurement processes, align procurement processes to organizational goals, and ensure that all processes are streamlined for perfect flow of information between different stakeholders.

References

https://static.uk-plc.net/library/cloudbuy/documents/brochure/state-of-the-art-procurement---a-cloudbuy-and-consero-group-white-paper.pdf