Business stakeholders often overlook sourcing and procurement departments, viewing them as tactical purchasing and contract administrators or even as barriers to the buying process. The pandemic gave procurement an opportunity to prove its value, as businesses relied on cost savings and critical supplies such as PPE-related goods and services to stay afloat and keep employees protected. Day in and day out, procurement professionals hustled to create innovative cash conservation and expense reduction opportunities to offset the need for departments to furlough or lay off valuable employees.
As a result, procurement quickly gained a seat at the boardroom table to discuss and lead decisions related to company performance — and not just in terms of savings. For procurement leaders looking to continue proving their value to business stakeholders, and keep their seat in the boardroom, consider these key takeaways — and learn what to avoid.
Invest in the right technology
Spreadsheets to organize your procurement processes simply don’t cut it for the modern business. Procurement leaders must invest in technology that supports their needs. Data from Coresight Research and SIG agree that 55 percent of procurement leaders have insufficient technology coverage to meet their business needs and 45 percent are dissatisfied with their current technology. Even worse, 84 percent believe that procurement technology is overpriced and doesn’t support their business case.
Leaders can’t rely on just any technology to support their needs. They need an integrated solution that enables data-driven decisioning, sourcing performance management, contract compliance and everything in between. By leveraging a solution that provides insight and support across the source-to-pay lifecycle, leaders have everything they need in one central location to prove their value and ROI rather than drown in spreadsheets to cover for technology and reporting gaps.
Another key component of the right technology solution is one with artificial intelligence (AI) and machine learning (ML) capabilities. AI and ML are a new frontier in procurement as they eliminate manual, cumbersome tasks and uncover gaps missed by the human eye.
Consider an electronics retailer that sources supplies for 1,000+ stores from different suppliers each month. The human eye can see only so much of what’s going on behind the scenes. But leveraging AI and ML technologies, leaders can quickly see opportunities for consolidation and non-compliant order patterns, highlighting the opportunities to drive value for the business.
Information like this can lead to a better understanding of where dollars are being spent each month and how to drive meaningful and sustainable value. Achieving this visibility is prohibitively resource-intensive using manual processes alone.
Work with a partner who can offer market intelligence
Some procurement leaders may not know how to prove their value to stakeholders. Having a partner who has direct insights into industry trends and can offer market intelligence is essential when procurement leaders walk into the boardroom.
And we aren’t counting consultants. While they may do a great job at showing you what you’re doing wrong and what you can do to fix it, they don’t show you how to fix it or help you execute a strategic plan to do so.
Procurement leaders already have a full plate and may not have the time to build a plan and business case to justify investments to their leadership. A third-party partner can dedicate time and resources to empower leaders, helping them showcase the ROI on the critical resource and technology investments Procurement teams need to make to stay ahead of the changing needs of the business.
Focus on collaboration and transparency
Often, procurement leaders are caught in a fire drill, for example when business leaders are notified of a contract due in three days that no one knew about. It falls on them to find a solution — and fast.
But with the right technology and partner in place, collaboration and transparency improve within the procurement department and across the entire organization. Procurement leaders have the resources in place to quickly renew contracts, share data-driven results and show accountability across the board.
The pandemic brought procurement front and center, and procurement leaders have worked hard over the past year to deliver against the changing requirements of their business stakeholders. Now is the time for procurement leaders to build on this momentum and upgrade their capabilities by investing in smart technology, working with third-party experts who can offer market intelligence, and improving collaboration and transparency with their executive stakeholders.