Procurement Practices That Foster Innovation
Most people assume that a career in procurement is all about cutting costs and slashing budgets. This perpetuates the misconception that procurement is It seems like a field where there is absolutely no room for creativity. However, this narrative is not only untrue, but can actually hurt the success and innovation of an organization.
In order to understand how a procurement department can be a source of innovation for a company, the idea that a procurement department exists solely to save a company money must be changed. A procurement department should be in charge of making sure money is spent wisely, rather than keeping money from being spent. For example, a procurement executive at Google found a way to bring internet to areas without access to it in the wake of a natural disaster. His innovative spirit saved Google money on the project while also creating good publicity and doing a great deed for many people in a desperate time.
By acting as a facilitator between a company’s internal and external innovators, a procurement department has the opportunity to bring practical, cost-effective results to a project. Beyond saving money, procurement uses creative processes to a business or organization by opening the door to new partnerships, business deals, and projects an organization might not find otherwise.
In recent years, procurement departments all over have been focusing their spending on sustainability. This includes making sure that the supplies in an office will last an appropriate amount of time as well as making sure the products your consumer receives are sustainable. It is critical that your procurement executives can trend forecast, meaning that they must be able to foresee the next major social trends in order to make the proper decisions to keep your brand up-to-date and relevant.
If your procurement department is not producing innovative projects or results, it could be because they are stretched too thin managing the large number of suppliers your company has. On average, 20% of a company’s budget is spent on small, infrequent purchases, otherwise known as tail spend. Optimize tail spend and gain control of that 20% with Fairmarkit’s automated tail spend management software so your procurement department can focus on innovation and creativity.
Originally published at fairmarkit.com on November 29, 2018.