Imagine an organization without a sourcing and procurement function in place, not possible right? The importance of a well-developed sourcing and procurement function in any business is high, a backbone that ensures an efficient supply chain management. Without a proper procurement function in place, the organization will face challenges in terms of selecting the best suppliers, identifying the cost-saving opportunities, and consolidating spend. Sourcing and procurement teams sit on valuable customer insights that can be leveraged to drive strategic decision making.
Tactical Is Passé, Sourcing and Procurement Is More Strategic
Organizations doubt the ability of the procurement function to deliver results beyond cost savings. As per traditional beliefs, the purchase function lacks the ability to optimize business performance and streamline processes. However, an organization can ensure an effective supply chain management by turning to the sourcing and procurement function as a strategic advisor. This means the management must not view it as a mere purchase function but take insights to drive the organizational profitability.
Drive Strategic Decision Making with Technology
Technology has played a big role in improving various operational functions such as inventory management, forecasting, supply chain management, and automating processes. With increasing investments, the sourcing and procurement function are set to witness few trends such as an increase in data sharing with suppliers, the role of analytics in discovering patterns, replacing legacy systems with cloud-based solutions, and outsourcing certain procurement functions with Procurement as a Service (PaaS).
Risk Management is Key
For the procurement function, risk management is extremely essential in ensuring a strategic role in the organization and delivering higher value to the bottom-line. By having an effective risk management strategy in place, organizations can mitigate risks related to suppliers’ and other economic factors that might have the potential to damage the business.
To know more about the trends in sourcing and procurement landscape