Usually, this time of year articles begin to appear stating that “Procurement is at a crossroads” or something to that effect. As the calendar rolls to 2021, this may be the year where that statement rings true. The COVID-19 pandemic in 2020 came quickly and offered little time to prepare. Companies with well-organized emergency plans activated those plans, but they were the minority. Most companies found themselves in reactive mode and struggled. Every business learned hard lessons that can now be applied to 2021 and beyond.
Looking forward, Procurement organizations need to think about 2021 from the following perspectives:
Embrace the Strategic Position of Procurement
As borders closed and product supply started to reduce, it fell to procurement to take a leading role in finding new suppliers and sources. Capgemini Invent Digital Procurement Research is a good read to learn more about procurement’s critical role in the overall value change.
In addition, Ardent’s “2k20 Series” featured a session entitled “What the pandemic means to your workforce.” The session highlighted strategies for businesses to leverage in both the long and short term with a focus on agility as critical to survival, understanding the practical limitations of the business and the role of remote work as a necessity.
One of the learnings from many procurement organizations was the strength of their relationships with their suppliers. Often, a preferred supplier turned out to be less flexible than a general supplier. In some instances, supplier categories were forgotten, with any supplier, IT, etc, providing bacteria wipes.
The Art of Procurement shared a story of a business and its struggles to navigate the business in the face of disruptions and a fracturing supply chain. For this business, a key learning of 2021 was not just understanding internal, hidden weaknesses, but the importance of partnerships, some new, outside of the business.
In her piece, “Neighborly procurement is the answer to individual efforts for diversity and inclusion”, Sally Ehrmann at Spend Matters discussed the idea of “neighborly procurement” to “to help promote economic growth and well-being for your neighbors”. Many companies found themselves working more closely with local suppliers simply due to closed borders. Continuing this relationship, as the article and paper note, can have a broad value to the business and community as a whole.
Look to Leverage Technology More
Several articles discussed the importance of technology to procurement in 2021. A BuyerQuest Blog, Digitizing the Invoice to Payment Process, noted the impact of manual processes as staff had to work from home, and how a move to digital invoice processing is more critical than ever.
Capgemini Invent Digital Procurement Research offers a comprehensive report on the functionalities of technologies in the source to pay process. The research offers insights and considerations as businesses look to more deeply integrate technology.
When writing about ERP selection, Alexander Buschek at Gartner offers some advice that can be just as applicable to other business technology selections. In her, “Midsize Enterprises Must Know: Business Strategy First, ERP and Applications Second!” The article makes the case that CIOs need to, “know exactly where you are heading (business strategy), where you are (business capability model) and how to get there (roadmap). Then you can select the tools you want to use (ERP or more general: applications)” For a Procurement organization, the idea is equally applicable.
2021 - Bring it on
For most, 2020 will be a year to forget. The upheaval, the sadness and the tragic loss of life are difficult to comprehend. Businesses shouldn’t forget the lessons brought this year as they plan for 2021 and beyond.