Why procurement is a changing role that requires new tools

Posted by John Glover

11-Nov-2014 10:43:00

Why procurement is a changing role that requires new toolsA climate of austerity and economic uncertainty combined with rapid technological progression has forced people working in almost every business function to accept and implement major changes. Arguably, no single group has witnessed change on a bigger scale than those in the procurement profession.

Today, the typical organisation's understanding of procurement has shifted from the process of 'buying stuff' to a strategic role that lends competitive advantage, has a real impact on profitability and performs the increasingly vital job of shaping the supply chain. This 2013 report from the Cranfield School of Management recognised how the influence of procurement - and its ability to resonate with top leaders as a priority - is growing.

Against this backdrop, which suggests a bright future for the function, many procurement departments have been forced to work with drastically down-scaled resources, while the legal landscape for procurement has become more demanding with the arrival of new EU rules. Both public sector and commercial teams are now tasked with delivering better procurement for less.

It certainly isn't an easy task when you consider the large number of stakeholders typically involved in a procurement project, as well as the inherent risks. Issues such as fairness (or lack of), human error and complexity can quickly derail any procurement process if not managed properly. Procurement's growing status as a strategic function and the added scrutiny that brings, together with the ongoing strain on internal resources faced by many departments, can make delivering procurement objectives in 2014 particularly taxing.

Unsurprisingly, professionals have sought out new tools to support and strengthen their procurement activity as they adjust to this challenging climate. Online collaboration platforms are increasingly instrumental in modern procurement processes because they help to deliver the three crucial qualities of any collaborative procurement exercise: equality, clarity and security.

When procuring products or services, it's hugely important to treat each bidder fairly and equally - indeed, failure to do so will leave an organisation exposed to legal challenges. Access to information for bidders must be as clear and straightforward as possible. Any misunderstandings will, at best, delay the project and at worst, lead to unsuitable bids and potential legal issues. The fact that one bidder could be the incumbent, and therefore have prior knowledge of the buyer and its processes, also makes clarity a key factor in achieving fairness. Finally, the security and confidentiality of all bid details is paramount.

Online collaboration tools enable the creation of secure online workspaces in which bidders can communicate with their potential suppliers in an open, transparent manner that is fully audited - a full paper trail of all interactions makes it easy to keep track as the project progresses. Workspaces can also be easily customised, which helps to create a space that closely reflects the needs of the project. Experienced procurement professionals will know that despite the presence of official guidelines and frameworks, no two projects are ever quite the same.

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Topics: collaboration tools, procurement