Many consider the procurement or purchasing function to be an essential but non-strategic component of any organisation. However, there is an important value chain in procurement.
This is the common opinion among executives as well as peers. It’s not that they think procurement plays no role. They just don’t see it as a crucial role that goes beyond finding suppliers and cutting costs.
Here’s some good news. Procurement can be strategic!
Historically procurement was considered to be a secondary function within an organisation. Its primary role was to procure goods and/or services as required by other functions in the organisation.
It is a view that has existed for a long time and many people still hold this view today.
Procurement, which includes purchasing, is often thought of as the group who will negotiate deals, place orders, and handle supplier issues. They think of procurement and purchasing as the group that will negotiate deals with suppliers to get more cost out of them.
83% of executives surveyed believe that their procurement function is not completely strategic, meaning that they do not think that it is crucial to the business leadership and that it isn’t a major input when making strategic decisions at a high level.
Studies also state that only 28% executives view procurement as an important part of their overall strategy. More than half (51%) do not believe their current procurement operating models are effective.
Procurement can be seen as a minor function by those who think it is just a group that places purchase orders for things others want and negotiates contracts.
For those who understand and appreciate procurement’s primary role, with its critical insights into the marketplace, competitive dynamics and financial performance of an organisation, as well as the ability to influence and define environmental, government and industry practices and the intelligence required to manage global Supply Chain networks strategically, it is a force to be reckoned with. When you need a procurement recruitment agency, consider https://talentdrive.co.uk/
It doesn’t matter if your procurement organisation does so much more than simply getting the lowest price and processing purchase order if nobody else is aware of all this added value.
The procurement professionals have mastered the art of buying. Now they need to learn how to sell, or market, their own capabilities, value and contributions!
Start by determining where your procurement team is in the procurement value chain continuum.
