Other companies are investing in their procurement teams.
Just because your neighbor or competition is doing it, doesn’t mean you should too. However, in this instance, copying leads to advantageous outcomes for you and your company. If a large swath of companies, particularly the fastest growing ones, see the importance of investing in their procurement and sourcing teams, it’s worth asking why. You may not understand all of these companies’ reasons, but just acknowledging and recognizing the trend (and doing something about it!) puts you ahead of the curve.
Procurement has the power to save your company major money and time.
If you have a world-class procurement and supply chain team, it is almost certain that your other KPIs are looking great as a result. How can this be? If you think about it, one of the most integral parts of procurement’s role within an organization is to find and source the best tools, technologies, and processes for your organization. If procurement is truly doing their job well, then that means they will have procured technology and tools that are efficient, effective, and useful, all the while sticking to the budget. With better tools and technology, your teams are enabled and empowered to work faster and better, which increases output and production, as well as saving everyone at your company time and money. It’s a win-win-win.
Bad procurement or poor procurement mistakes can lead to major losses in time and money.
On the other side of that, a bad procurement team has the potential to do a lot of damage. They can get in the way of everyone at your company. A bad or poor performing procurement team means that they either don’t understand the business’s needs and/or do not source the absolute best and most cost effective tools and technologies for your company. We all know what the consequences are when we don’t have the proper tools to do our jobs- we struggle, waste a lot of time, and are generally much less effective than if we were better enabled with a better tool kit. Employees who are not equipped with the best tools to succeed will not be able to produce product and output in a valuable and efficient way, costing you significant losses in revenue and time. Tools can either speed up an organization’s productivity and effectiveness, or slow it down significantly. Procurement lies at the heart of all this as they are in charge of finding the best tools and technologies for your team- if procurement isn’t empowered, the rest of your organization will suffer. A bad or poor performing procurement team is more dangerous than most would expect, which is why it is so important to invest in them. A small investment has huge implications.
Procurement affects the entire company.
As evidenced above, procurement teams affect the entire company because the tools and technologies they procure and purchase affect employees one way or another. Often times at smaller organizations, there is no official procurement team, and everyone is left to finding and using their own preferred tools. This may work well for a startup or small organization, but if you’re looking to scale or become a world-class company, it just won’t cut it. Eventually, you will need a procurement team, and that person has the power to make your team more productive or slow everyone down. Obviously you want the former, but the only way that can happen is if you find the best procurement professionals and equip them with best-of-breed tools so that they can find the best tools and solutions at the lowest prices.
Procurement could be your strategic advisor, and secret weapon.
Many world-class companies not only realize the overwhelming effect procurement has on their entire company, they also know that procurement, if done right, can be their personal and company’s secret weapon.