Over the past few months, the world has changed immeasurably.
Every day I’m speaking to stakeholders whose businesses are having to overhaul their processes, from the way they interact with customers and, in some cases, their entire business model, in order to survive.
Across all industries, innovation is taking place to help companies adapt to the challenging new circumstances we are facing. In retail, for instance, we’ve seen a whole host of solutions rolled out – from cashless payments options to the deployment of creative technologies, such as the use of augmented reality in virtual shopping experiences. We’ve also seen trends accelerate dramatically, such as the movement towards tele-health and online learning in virtual classrooms.
To transform at speed like this, organisations need to work closely with their supply chain partners in order to access the advanced solutions that make this possible. And this is where procurement has a vital role to play in the post-Covid world – helping organisations work with suppliers who can enable innovation to happen at a faster pace.
Procurement has the potential to be a tremendous asset for businesses seeking to change quickly. Internal departments should be turning to their procurement teams for advice and seeing them as a resource that will help them find solutions to their challenges, as they have their fingers on the pulse of what support is out there to help.
We should acknowledge though, that this isn’t how many have traditionally viewed procurement teams. Rather than being enablers, the far more pervasive perception (whether it is fair or not), is that they are the ‘cost police’. Working between procurement and marketing teams every day, I’ve witnessed first hand the benefits that procurement provides when they have the opportunity to partner with their marketing colleagues.
Here are three things procurement can do to change old perceptions and help win hearts and minds, so that they can become a sought-out resource to deliver outstanding results:
1. Share knowledge of market trends
Procurement can be a key source of knowledge for each department within a business. Through their evaluation of suppliers and the competitive landscape – who the leaders and the disruptors are – they can paint a comprehensive picture of the current marketplace for internal stakeholders.
By sharing this knowledge, procurement teams will help stakeholders move faster and make informed decisions. It’s vital, however, that procurement teams do not wait until supplier contracts are up before they begin to share this knowledge. To build trust, it is a worthwhile exercise to share their knowledge regularly as a matter of course.
2. Facilitate relationships with suppliers
A crucial factor, which will allow businesses to innovate faster, is the ability to access the best minds and solutions in the market. In this regard procurement teams, which already have relationships with suppliers, can extend introductions to their internal teams.
Procurement can act as a facilitator and bring people together. And furthermore, if procurement teams can handle all the difficult and distracting conversations around contract frameworks – covering scope, SLAs, etc – then it will help key stakeholders, on both sides, to focus on the innovations that will solve the challenge at hand.
3. Getting greater value from suppliers
The third key benefit procurement can offer in the innovation process is their understanding of the key internal business drivers. When speaking to the supply chain they will be able to provide insight that could help suppliers to pull together a better proposition for their organisation, before discussions begin with internal stakeholders.
It also means that during negotiations, procurement teams will be able to identify where added value can be provided by suppliers. This requires procurement to put greater emphasis on the return on investment from a supplier partnership, over the ability to deliver short-term savings. This approach is most likely to have a better long-term impact for the business.
Procurement teams in many ways hold the key to businesses being able to innovate faster. Of course, they still need to protect the business and its bottom line, but they now also have a responsibility to help the business change. And they can do this by creating an environment that inspires innovators and encourages fruitful relationships between stakeholders.
This will be vital in the post-Covid world, where embattled businesses will need that help to first survive and then thrive. That can only happen if internal stakeholders trust that their procurement team is an asset – and that will be possible if the focus is on building bridges and adding value that delivers real benefits to their stakeholders and the bottom line.
☛ George Smart is global director of customer solutions and strategic growth at APS Group