Procurement is evolving to reinforce its position as a strategic enabler of company growth. How can agency partners organisations to realise this?
As a communications group, we see that procurement is undergoing change, to play a growing role in the company’s ambitions. No company has cost savings in their mission-vision statement. More likely, it’s focused on innovation and growth. And though profitability is important, no business ever saved its way to success and glory. Purchasing Agent In China
Hence, procurement is evolving to become an enabler of company growth. Do your agency partners realise this? At Frontera Group, we do. We appreciate that a new mission often requires transformational change, and procurement has a growing role in that.
Here are 3 trends we recognise & how Frontera Group can help:
TREND 1: FROM COST CUTTING TO GROWTH ENABLERS
More than 66% of Chief Procurement Officers (CPOs) are prioritizing supplier collaboration and other broader value-generating activities. Collaboration with suppliers has always been important. With the changing landscape, procurement cannot afford to communicate with suppliers just over price - instead, there’s a focus on improving synergies with them. Suppliers are increasingly given visibility of all steps in the acquisition process, to help get the best price by clarifying the opportunity / risk. This transparency supports the need to feel empowered and promotes healthy competition between partners, benefiting the organization.
With empowerment comes the need for effective supplier evaluation - focused, smart, effective method for measuring, analyzing and improving business performance and thereby reducing costs, increasing efficiency, enhancing network relations.
https://hbr.org/sponsored/2022/01/procurement-teams-aremoving-fromcost-cutters-to-growth-enablers-2
TREND 2: ACHIEVING EFFECTIVE CHANGE MANAGEMENT
80% of CPOs are investing in an updated operating model to meet new business needs, (only 13% report being satisfied with their current approach). Procurement leaders often confirm change management as the biggest roadblocks in achieving defined goals. The application of tech means transactional work is becoming automated, leaving time & resource for more strategic activities. But change management is not easy, as it brings a sense of insecurity about the end result and so resistance to undertake new initiatives. Smooth change management requires regular communication with the employees to engage them through the process and provide adequate training / support.
TREND 3: HAVING A DIGITAL STRATEGY
32% of executives have implemented a digital strategy, despite 85% of them believing that digital transformation is fundamental. Many companies today fail to see the threats and opportunities that digital represents. With customers drawn to data driven services and experiences, many fail to appreciate the growing value of data and digital ecosystems.
Most leaders realise that improving performance demands organizations have to take the leap from manual to digital transformation with an approved strategy. Procurement plays a key role in ensuring organisations invest in the right infrastructure, processes, and resources with a vision that aligns with the organization’s long-term objectives.
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