The role of the procurement department is crucial for any business regardless of its size and industry. To be precise, the procurement team is responsible for ensuring the organization’s purchase process is error-free and the goods or services are acquired at a reasonable price. It is a fact that the more engaged an organization’s procurement team with the stakeholders is, the more efficient the bottom-line of the company will be.
We all believe that the purchase team's relationship with the vendors is the most crucial in business; however, we fail to understand that their engagement with the department heads, finance, legal, and senior management also plays a critical role in the purchase cycle. The purchase efficiencies of the organizations increase when their procurement departments proactively get engaged with the stakeholders.
And it is undeniable fact that the more proactive the purchasing team is, the better the savings are. That’s why every organization looks into the procurement team to know how much did they save that gives an outline of their overall corporate spend to calculate ROI.
Best Practices of Procurement Teams from Succesful organizations:
We at PRM360 have seen that the best organizations have a greater engagement with the stakeholders ensuring greater savings. So how can we engage the purchasing team with the internal stakeholders?
Here are a few of the best practices of the procurement teams from our current partners:
The purchasing team maintains a great relationship with the other departments - they know their operational pain points, the hierarchy, and keep an update on their significant achievements, how the procurement team impacts their departments, etc.
They don't push the company's policies to the other stakeholders, rather they analyze how is it becoming a hurdle to their operations and try to come up with better solutions to keeping purchase compliance in order.
They know in and out of the business. They meet their sales and marketing team, understand who their competitors are, understand how they are valued in the market, etc.
They keep adding value to the internal meetings, talking about the budget allocations for the procurement, how it rose or any deviations from the planned as the other departments don't have a clear view on this.
They know their internal teams’ behavioral aspects, understand what kind of people they are talking to, and adapt accordingly.
The procurement strategy of the company is aligned with the goals of the internal department. As every stakeholder doesn't have an objective to reduce cost; they have their key metrics to achieve and the procurement team can help them to get the work done within the allocated budget.
They are great listeners with an open mind. They listen completely to the departments on any issues related to the vendor or material before coming to a judgment which helps them to analyze whether the contract is not structured well/stakeholders are not engaged/issue with the vendor etc.
7 Quick tips for procurement teams to excel in their role:
We understand how progressive procurement teams drive value to their organization and customers. So here are a few quick tips for all the procurement professionals out there, that help them excel in their role in the long run:
Understand the requirements and the pain points of the end customer
Be proactive with the other departments and identify the challenges to help them get their jobs done effectively
Monitor and review the current development plans of the business to ensure the limit of corporate spending is maintained at an optimal level
Engage with suppliers to understand the available options in terms of design, production, delivery, and service with changing requirements
Coordinate with colleagues and leadership team and contribute to achieving business goals
Connect with the procurement experts of various industries and get insights that help to take their business forward
Be well informed with the ever-evolving marketing trends to stay ahead of the competitors