5 New Year’s resolutions for Procurement Managers in 2017
January is generally synonymous with New Year’s resolutions. Which New Year’s resolutions will be made by procurement managers in 2017? What choices should they make in relation to technology, performance, partnerships etc.? Here’s our proposal of 5 New Year’s resolutions to make this year, which are in line with procurement trends today. Will you make the same ones? By Kristina Pousseur, Marketing Manager, SynerTrade
Resolution no. 1 - I will take part in increasing the digitisation of my company
In companies, the potential of the internet, of social media and of process automation were first of all understood by the marketing and communications divisions. These departments were the first to harness the power of technology 2.0, and later 3.0. Communication, in this setting, has become conversational and collaborative. Now however, these areas of great potential are also applicable to the finance and procurement departments of a company. By equipping your department with an efficient eProcurement solution, you will accelerate the company’s overall digitisation and increase its performance. How? Start by dematerialize your documents. Contracts, invoices, purchasing terms, consultation files, tendering forms and so forth can all be created and managed via your eProcurement solution. Data and documents are therefore traceable and they are always taken care of. Your data will also be more visible, and you’ll have more efficient means at your disposal to keep them up-to-date.
A far cry from the world of paper, opting for a procurement solution allows you to make use of cooperation across service departments and make the flow of information more dynamic internally. Externally, it gives the company a broader reach, and allows it to better source and optimise relationships with suppliers. The procurement department is a leading player in the digitisation process today, alongside, and in conjunction with, the finance department. It’s certainly something to think about.
Resolution no. 2 - I will help make the supplier relationship a contributory element
It has been a long time since those in procurement simply sought out the best price and negotiated contracts! We broached the topic briefly in our first New Year’s resolution above, but let’s stop to think about the supplier relationship in 2017, and about your SRM (Supplier Relationship Management) tool for optimising this relationship.
In the context of trade globalisation and constant competition, where legislators set out complex rules and public opinion demands ethical behaviour, the supplier relationship has changed. If, within this environment, you can no longer benefit from considerable price reductions and discounts, then each point gained in terms of the company’s results becomes a performance factor. The SRM allows you to turn the supplier into a genuine stakeholder in the relationship. Through a collaborative digital platform, you give your supplier, wherever they may be, the opportunity to update their data, enhance their profile and easily respond to your invitations to tender. You can regularly evaluate this supplier and encourage them to do better according to your selection criteria. By setting up precise and traceable invoicing procurement processes in your company, you will be able to pay your suppliers in a timely manner, and perhaps even negotiate special deals. Every party has something to gain. And your actions will have a positive impact on your overall results.
Resolution no. 3 - I will make CSR a primary concern
Whether it be in relation to workers’ rights in the textile industry in certain geographic areas, or traceability in the food-processing industry, companies’ social and environmental responsibility is today a real selection criterion in terms of public opinion, be it in the B2B sector or in the B2C sector.
Procurement management is now at the front line. It’s important to source the suppliers and service providers that fulfil all of your company’s demands, and which allow it to guarantee the provision of impeccable products for all your target customers. Having CSR in mind prevents potential reputational risks by ensuring that partners are thoughtfully chosen. It’s also a means of ensuring working comfort and of bringing additional competencies to the procurement department, as well as to all those who use it within your company and who have an influence on the procurement process.
Resolution no. 4 - I will cooperate with the Administration and Finance departments
How to do better in terms of financial performance without taking additional action at the commercial level? By reducing costs. Each reduction in costs bears an impact on overall results, whereas growth in terms of revenue implies greater spends. By securing the adherence rates of your contracts using your SRM solution, you will be able to reduce spends by limiting invoices without purchase orders. You will also optimise accountancy work thanks to an entirely automated expenditure management process (procure-to-pay process), as well as reducing the workload and making the purchasing and invoicing process more secure. Furthermore, you will allow the finance department to settle payment with suppliers in a timely fashion, even in advance in exchange for a discount.
The efficiency of partnering the procurement and finance divisions is evident nowadays, and the digitisation of the workplace is enhancing their symbiotic relationship. Already very close, these departments are crucial for the success of the business of tomorrow. It’s also something to think about.
Resolution no. 5 - I will rely on Big Data Management
Big Data management is becoming a factor of daily working life, and it should no longer frighten companies. New software solutions allow for the easy gathering of supplier data, but also for the injection of data extracted from third parties, which may be used to enrich this database and make it all the more relevant for analytic purposes. When well sourced and well managed, data contributes to the making of strategic decisions in areas that are well-known to the company, all the while limiting the risks taken while doing so. Data also allows for constant tracking and continuous process improvement. Today, Big Data management is among the tools that will give your company the capacity to avoid financial, CSR and legal risks, while making the right choices for the company’s development.
In conclusion, in 2017, take measures to enhance the strategic role of your procurement department, open its doors, break down barriers and rely on your information systems.