Businesses are continuously measuring their operational efficiency against market and supply uncertainty as the pandemic continues. Procurement organizations have taken the lead over the last year as the corporate focus has been on managing costs and ensuring continuous supply. Historically, as conditions improve, and corporate focus turns toward different goals, procurement’s level of influence will decrease. Procurement will face challenges maintaining its influence.
Maintaining Strategic Influence
Gartner published a report entitled, “4 Tactics Procurement Can Use to Sustain Influence as Economic Conditions Improve” that offers recommendations to procurement leaders focused on maintaining or improving their strategic influence.
The report notes that “The ascent of cost management and supply continuity as top business priorities increases procurement’s influence. As economic recovery nears, however, procurement leaders are beginning to ask how to sustain this influence and continue providing strategic value post crisis” The report highlights 4 specific actions for procurement leaders to maintain their influence.
Challenges Overcoming Perceptions
The report highlights some specific challenges that procurement organizations face as it relates to their perceived value to the company. Among the challenges are, “Narrow perceptions that procurement’s value is exclusively aligned with cost management and supply continuity increase functional influence during a recession, but limit it as soon as recovery begins. According to Gartner research, less than one-third of procurement organizations maintain intelligence about business partners’ priorities and when or how they change, limiting procurement’s ability to remain aligned with business priorities as economic conditions fluctuate. Procurement staff overwhelmingly predicate the value of their support on procurement-centric metrics, such as cost savings or supply assurance, which align well with business priorities during a recession but create a disconnect once recovery begins. “
The Gartner report warns, “Without proactive action, procurement leaders risk succumbing to a similar disconnect today. “
Establish and Report Value
The report offers recommendations that include specific steps such as, “Connect procurement’s value to business priorities beyond cost management and supply continuity by documenting a comprehensive list of procurement projects aligned with anticipated business priorities post-crisis. Collect, document and disseminate intelligence about business priorities to ensure alignment as economic conditions improve by requiring category managers to maintain comprehensive category intelligence documents. Reshape procurement’s brand image by expanding dashboard performance metrics beyond cost and supply continuity to incorporate other business priorities such as revenue enablement, corporate social responsibility and speed; and track functional alignment with business priorities over time by deploying an annual business partner alignment survey.”
The BuyerQuest Procure-to-Pay platform was designed for ease of use and modularity. The platform can be a strategic asset for procurement. The purchasing interface is built like a business to consumer website with all of the compliance and controls. The intuitive supplier portal makes it easy for suppliers to feel empowered.
With the BuyerQuest platform, procurement can continue to drive new savings and ensure continuity of supply, while better aligning procurement to broader corporate priorities.
Read the full Gartner report, “4 Tactics Procurement can use to sustain influence as economic conditions improve”
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Gartner, 4 Tactics Procurement Can Use to Sustain Influence as Economic Conditions Improve, Ryan Polk, 5 August 2020.