This is an AArete Profitability Improvement insight
As the business world continues to change, the nature of procurement is changing as well. While procurement was once tactical and transaction-focused, in recent years the role has evolved into an operations and strategy advisory role in which deep expertise of business requirements is essential.
New tools have automated many traditional procurement tasks, freeing up procurement professionals’ time for more in-depth activities that can make a measurable impact on their businesses. Many C-suite leaders are starting to recognize the unique perspective that procurement professionals can bring to helping companies make better-informed decisions and drive organizational change.
Instead of executing the wishes of their business owner when it comes to vendor contracts, procurement professionals can take a proactive approach, asking tough questions that can lead to cost-saving opportunities — potentially up to 30% annually.
Procurement professionals’ unique ability to see how money is being spent across an organization can also help them lead cross-department collaboration. By collaborating with stakeholder groups, they can evaluate the need for certain supplies in the work-from-home environment, focusing on the pricing of IT peripherals to support remote workers. They can also examine opportunities to outsource certain services, which can cut costs while increasing customer satisfaction survey scores.
For large organizations, it’s not uncommon for unused or underutilized software licenses to drive up costs dramatically. By mapping out employees’ actual use of software and determining whether their access level is appropriate, procurement professionals can eliminate redundancy and save their companies money in the process.
AArete Managing Director Tyler Higgins has contributed a new guest article to Supply & Demand Chain Executive, titled “Transforming the Role of Procurement from Cost Avoidance to Value Creation,” in which he details several ways in which procurement professionals can redefine their roles and create cost savings for their companies.
Read the article here
