Creation of business partnerships a priority for procurement

12 January 2015

Procurement executives say they have formed a successful partnership with the finance department.

Some 62 per cent of procurement executives surveyed by e-procurement provider Ivalua said they share the same objectives as finance, suggesting procurement departments have become more aligned by including financial goals in their strategy and operational approach. This compares with 43 per cent saying they share the same goals as the legal department and 39 per cent having the same objectives as IT.

However, the 2014 Procurement Executives Survey also found a significant gap between procurement and other business departments’ perception of procurement’s goals, particularly when it comes to establishing processes.

The creation of partnerships with business units is a current priority for procurement executives, the survey of 400 procurement executives and 350 business unit heads from multinationals found.

It said 83 per cent of respondents cited this priority, yet the research also found procurement has to master all steps in the purchasing process before it can become a true business partner.

The largest majority (71 per cent) of respondents said being proactive in developing an understanding of supply markets before needs emerge is one way to achieve this. Some 63 per cent said establishing effective communication tools would help create a partnership relationship between procurement and other business functions.

“The survey demonstrates that despite procurement’s willingness to move closer to the business’ stakeholders, to address their specific issues and to better connect with them, it is not viewed as a fully-fledged business partner yet,” said Gérard Dahan, general manager at Ivalua, EMEA.

“Achieving this new operating model requires procurement to develop buyers’ strategic vision of each business units, their leadership skills as well as their ability to guide and influence business decision,” he added.

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