Six Best Practices for Elevating Procurement at Your Organization


Among the countless insights to emerge in this era of sudden and accelerating digital transformation, your enterprise may have experienced the fragility of a supplier ecosystem that’s easily disrupted by unpredictable events.

With your critical suppliers so fully integrated into your operations, rethinking your procurement and spend management practices and adopting cloud-based technology can help bring business advantages to your organization.

If your enterprise tends to view procurement as a matter of logistics and cost containment, this practice is overdue for greater consideration. According to Shashi Mandapaty, chief procurement officer for the corporate tier at Johnson & Johnson, “Cost management still matters, but progressive procurement organizations have evolved to address nonfinancial aspects as well—priorities like innovation, risk management, resilience, and corporate citizenship.”

High-performing procurement organizations are driving enterprise growth and resilience by facilitating internal collaboration with stakeholders, identifying new sourcing opportunities, strengthening organizational agility and efficiency, and reducing risks and costs.

Key Steps to Take

To help your organization achieve the full potential of a high-performing procurement organization, adopting a start-up mentality toward changing your spend management processes and tools may be a rich opportunity for growth.

Regardless of where you are on your journey to high-performing procurement, it’s a good time to consider implementing six procurement best practices:

  1. Establish a unified core for data. Making the right decisions, based on shared knowledge and common data and analysis, requires all information to exist with a shared viewpoint, language, and methodology—ideally, on a cloud-based platform.
  2. Create a dynamic information flow. When your information moves in a continuous flow among finance and planning, internal customers, and suppliers, your organization can manage its procurement planning with greater confidence, collaboration, accuracy, and flexibility.
  3. Automate manual processes. Adopting digital acceleration tools can help your organization eliminate manual transactional processes, providing easier access to procurement services by seamlessly routing work between procurement and finance systems, simplifying onboarding, and automating risk assessment and governance.
  4. Improve collaboration with critical suppliers. With emerging business opportunities, growing risk management and regulation, and an increasing awareness of corporate responsibility, your relations with your supply network call for continual maintenance and communication of evolving operations.
  5. Adopt an automated, consumer-like model. While sourcing and procurement have traditionally been reactive practices, dependent on incoming requests, your organization can take a more proactive approach that lets internal stakeholders access applications to initiate early engagement with procurement.
  6. Enrich planning capabilities. By using a cloud-based platform, your procurement practice can provide internal stakeholders and partners timely, forward-looking analysis that empowers them to make better decisions, explore more scenarios, and support a continuous, agile planning model.

Adopting the Right Procurement Tools

Forty-five percent of respondents to a recent Harvard Business Review Analytic Services study report that the pandemic is accelerating the automation of the procurement process. In fact, enterprises that responded to the pandemic by accelerating the digitization of once-disjointed and risk-prone procurement processes may be starting to see the advantages of incorporating real-time insights into sourcing projects and performance.

Connecting procurement, stakeholders, finance, and suppliers with easy-to-use cloud-native spend-management technology can drive several immediate business results:

  • Expedited workflows: Cloud-based sourcing and supplier management tools can enhance collaboration, streamline processes, and provide anytime accessibility, aggregating information quickly and increasing efficiency.
  • Agility to support business continuity: More agile spending and supplier management can improve your organization’s cash flow, minimize risk, and ensure business continuity—all critical capabilities, particularly in a downturn.
  • Overall spend optimization: Enterprise leaders must ensure that their spend delivers returns on investment. Automating spend-management processes, including sourcing and procurement, through collaborative and easy-to-use technology can support alignment across the enterprise to meet business objectives and improve margins.
  • Intelligent supplier insights: With strong supplier relationships and a better understanding of their suppliers’ financials and criticality to the business, procurement professionals can act as scouts in the global marketplace to help identify new revenue opportunities, ensure business continuity, reduce risk, and support cost savings.

Your Future of Procurement

In an unpredictable and rapidly changing environment, the ability to compete may depend on managing your enterprise spend by automating your sourcing processes and sharing information to help you boost your agility, visibility, and digital connectivity.

An organization’s procurement practice can help offer competitive advantages by embracing new processes and adopting new technologies that give it a greater strategic role, helping you improve your offerings and your suppliers’ capabilities.

Beyond greater financial opportunities, procurement leaders using new tools and processes can introduce other advantages to your business, such as environmental stewardship and enterprise resilience. And adopting technology that automates transactional work can free your organization’s employees to forge new supplier partnerships, re-engineer products, and build a new model for sourcing and procurement processes and relationships.

Click here to learn more about procurement at Johnson & Johnson and see how Workday can help your procurement practice grow your business.

 

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