5 Tips to Master Procurement Transformation
Procurement has evolved to become a strategic and proactive function – a sum of profitability, growth, and competitive advantage for an organization. Leaders today are approaching it with a fresh perspective, exploring new processes, and technology to help them harness its full potential. Though there is no textbook answer to what the right approach is, there does exists best practices, which can help in steering your organization in the right direction. Moglix hence, is sharing some best practices that will assist procurement managers in mastering procurement transformation:
- Embrace Digitization: In today’s digital age, technology is your friend. A lot of CPOs are prioritizing the digitization of source-to-pay-processes. As new innovations usher an accelerated pace of digitization, figuring out new ways to use it to your advantage should be a procurement function’s primary focus. Automation can help in higher value work (with the saving of man-hours and increased efficiency) and drive innovation and risk-reduction.
- Data is Key: New trends are always attention-grabbing, but if your organization’s foundation is strong enough, then technological innovations can take it to the next level. Poor data quality is a major barrier that organizations can encounter when it comes to smarter procurement practices. Procurement leaders today are leveraging smart analytics to first generate clean data and looking at management solutions for master data. Hence, even though digitization is your ally, quality data serves as the foundation that needs to be strong.
- Change is constant: Much like natural evolutionary progression, organizations that welcome change, adapt and evolve are the ones that stay ahead. Markets keep evolving rapidly as new technologies emerge to disrupt existing traditional business models. New risks, new regulations etc. signify that change is the only constant. Smart procurement can help an organization adapt, meet regulatory requirements all the while managing supply optimally according to the changing tariff landscape. Hence flexibility and agility will help in leveraging technology to meet any needs.
- Smarter Decisions: Supply risk management is the heart of procurement and requires smarter insights. Having a profound understanding of existent and potential suppliers can help in risk reduction. In fact, new age tools now make it much easier to generate insights, which can help in addressing any existing deficiencies. Taking proactive measures when it comes to your suppliers is the key to risk-reduction and better supplier relationships.
- Employees are Your Backbone: To be a successful procurement leader, you need to assist your employees in doing their jobs better. Your employees need to start viewing the purchasing experience as an enjoyable activity as opposed to an unnecessary hassle., To do that, this process needs to become as seamless as possible.
Granted that every organization has its limits, but creating built-in factors such as, preferred suppliers list etc. into your procurement process will help your employees keep a better track of orders. The more you boost your employees the better it is for the procurement function.
As procurement rapidly evolves from a support function to a value generating function, it needs to provide critical strategic direction across the enterprise. Hence, mastering procurement will require better process flow, leveraging technology and creating workforce development initiatives. The focus needs to shift to system stability and the aforementioned tips will guide you in mastering the wave. Tell us more about what you think are the crucial pointers for mastering procurement transformation in the comments section below. We’d love to hear more from you!