After a flurry of activity around procurement last summer, things have been rather quiet lately. Is that a good thing? If you are a public company, generally that is a very good thing. The last thing public companies need is to have their names dragged through the mud due to questionable procurement practices.
So let’s take this time to contemplate the future of procurement. Will it remain a tactical activity used to save organizations money, or will it become more strategic and help craft the vision of the future? I hope it becomes the latter. Here are two reasons why procurement needs to be more of a strategic function:
- Everyone in the organization does it – there are very few functions within an organization that anyone can do, and purchasing is one of them. All the more reason to have a comprehensive strategy to leverage that and maximize value.
- It has a direct impact on the bottom line – when savings occur or higher prices ensue, it has a direct impact on the bottom line, you either pay more or pay less to buy the same things. The cost of the resources do not change, only the results of the contract.
As a result of the number of people within an organization that are impacted by purchasing, it only makes sense that it should get some face time with the senior executives. Changing procurement models does not happen overnight and impacts the whole organization, so it requires support at the highest levels of the organization.
Tags: bottom line, procurement, results, strategy
