How modern procurement can significantly boost business performance

Companies that have modern procurement and intelligent workflow processes can be 33% more innovative and 30% faster to market.

But procurement is struggling to get a seat at the table - over 1/3rd of leaders say their business won't invest in procurement. How can teams be more strategic and reach their potential if they aren't being invested in? After all, it's a win-win for the business.

The perception needs to change.

Jesse Russell, North America Head of Purchasing at Vertice, joined Procurement Foundry's Founder Michael Cadiuex, along with Bill Browning, Director of Procurement at 6sense, and Danielle Salyers, 2nd VP Strategic Sourcing Allied Solutions, to uncover:

• How procurement can contribute to business success
• How to spot the warning signs of antiquated processes that might be detrimental to growth
• The results of the Vertice Global Procurement Impact Report
• Immediate and real changes procurement teams can make to improve their SaaS costs from these insights

What makes an additive procurement team?

Put simply, additive procurement teams focus on enablement, collaboration and problem solving.

Bill from 6sense notes it make sense to view procurement teams in the same light as a service organization. Effective procurement departments are there to support other functions at pace, make sourcing and purchasing as easy as possible and should craft a partnership with everyone to seamlessly input into their own workflows to realize the true benefits.

Any procurement procedures, workflows and processes need to fit a company's unique needs. Other procurement teams may blindly implement a large, heavily mandated procurement structure that will confuse, delay or even disrupt projects, or include regulatory compliance guidelines that are so dense that people either get confused by them or just ignore them entirely - both situations leading to negative consequences.

The teams that provide the most value improve a company's procurement maturity and, by aligning their goals with that of the organization's, can be strategic and introduce changes when they are ready to do so. Slapping a company with a new procurement model when they aren't ready for it means it will fail and the overall adoption of the new model doesn't happen and, ultimately, the procurement team loses credibility within the business.

Can procurement teams influence company performance in a meaningful and measurable way?

Jesse notes that there are multiple ways that procurement teams can show that they add value to a company performance.

Danielle from Allied Solutions adds that focusing on the more qualitative side of the business can better affect revenue growth - areas like improving supplier performance and tracking internal accountability rather than pure cost savings.

Operational efficiencies, partnerships and visibility of responsibilities are less quantifiable but are still valuable measurements of how procurement is adding to company performance. If stakeholders and teams know how they can impact the process positively, efficiently and to schedule, this drives process buy-in which means it's used more often and trusted more so too.

However, being able to do all of this is another matter. And it's harder than we think.

In the Vertice Global Procurement Impact Report, those that are influencing company performance in a positive, meaningful way that's also strategic and quantifiable sit at the top of the maturity model. They have highly engaged stakeholders, a highly automated workflow and are able to contribute to the larger company growth strategy. But they are in a minority - only 18% of respondents felt they fit this category, meaning 5 in every 6 are missing out on measurably impacting company growth.

What traits do procurement team need to avoid in order to be impactful?

Many procurement teams think that a 'one-size-fits-all' process will work and provide a lot of flex. However, when analyzing this it quickly becomes obvious that this causes more problems than it solves.

Take data security, for example. Michael Cardieux highlights where this can cause bottlenecks and inefficiencies if using a singular approach. If a business is operating across multiple geographies, these come with their own data governance laws and documents - each needing to be understood and applied to pass security checks. But, if the single process only takes into account US data laws (because it might be the biggest market for the business in question), any new due diligence that must be done for EU, Canadian or other areas using difference governance laws than the US will put a highly inefficient blocker in the workflow as these are completed.

Flexibility is about being able to tweak your process for the requirements of the vendor and the ultimate goal - are you looking to save solely on costs? Are you looking at plugging a potential gap in legal and security issues more than total value?

Being the policy police and manual processes are blockers to company-wide buy-in

Inefficient manual processes mean that checking policy becomes more arduous, time-consuming and creates a perception of procurement as a blocker to progress because the 'policy said so'.

It also breeds confusion as to what the policies actually are. Therefore, with no known guidelines to steer any intake requests, procurement end up batting away a lot of them because they don't the policy, and this creates frustration from those requesting it.

Automation is a catalyst for additive and strategically important procurement

No modern teams work with spreadsheets anymore, so procurement should be investing in themselves to move away from this and become a force multiplier.

Automation is an enabler to growth, centralization of any procurement process and also to company-wide buy-in. And, according to the Vertice Global Procurement Impact Report, the key to unlocking higher levels of maturity where procurement can service teams better, be more strategic and provide real business value.

So it becomes imperative that procurement teams are implementing automation to reach their goal of being additive.

Truly additive teams focus on business value

It might be easy, as procurement leaders, to try to dictate what business can and can't do - because you hold the knowledge and are the gatekeepers of technology. And that's fair enough, your concerns and opinions matter strategically and should be listened to.

However, this is a sure-fire away of getting a perception as a blocker and the 'policy police', which then decreases interest in investing in your operations - ultimately holding you back.

To showcase your own value, start in a listening phase for the values of the business, and figure out how you can attune your efforts to that. Supporting the growth of the business improves your processes and output far faster than a more 'protectionist' stance of focusing on control, e.g. with costs.

What to do next

Watch the whole webinar with Procurement Foundry here.

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Discover the state of your own procurement maturity by taking the Vertice Procurement Self-Assessment, which not only gives your own maturity score, but individual and actionable takeaways you can use to bump up your procurement maturity.