Modernising procurement to overcome challenges: Forbes
A recent Forbes article looked at how to modernise procurement for modern business challenges.
The article was written by Rujul Zaparde, cofounder and CEO of Zip, an intake-to-Procure solutions company focusing on bringing a consumer grade user experience to B2B purchasing.
The article emphasises that "spend visibility begins and ends with procurement, a function that has remained largely unchanged for nearly a decade. With renewed business mandates to reduce costs, mitigate risk and increase efficiency, outdated procurement processes won’t meet requirements."
Zaparde emphasises the importance of companies' "evaluating current processes, identifying inefficiencies and potential blind spots, then implement the right procedures to achieve a modern, scalable procurement process."
Here are the five essential steps that he offers, for organisations to take to modernise their procurement process successfully and overcome common challenges:
1. Redefine the procurement process to start from the moment a request is initiated
In today's modern procurement workflow, it's essential to provide employees with an easy-to-understand and standardized intake process. When new employees join a company, they should have a centralized resource to request permission to purchase necessary tools. By offering a single purchase request intake, businesses can reduce compliance risks and gain complete visibility across the purchasing lifecycle.
2. Automate spend approval workflows across the stakeholder chain
Identify all the stakeholders who need to approve different types of purchases, including finance, accounting, security, and legal, and create a matrix. Then, deploy a solution that enables requests to be routed to the relevant stakeholders. Avoid non-transparent and confusing processes and use automated tools whenever possible.
3. Stay ahead of renewals
Renewals should not be left to the last minute, as it can make it challenging to negotiate better pricing with vendors. A centralized system should be put in place to remind stakeholders of upcoming renewals and to avoid delays in approvals.
4. Integrate procurement processes with existing technologies
Ensure that the procurement process integrates seamlessly with existing tech stacks and day-to-day tools that teams rely on, such as internal communication tools like Slack or Microsoft Teams, ticketing, project management tools like Asana or Jira, or contract lifecycle management (CLM) tools like Ironclad.
5. Communicate procurement modernization early and often
It's crucial to communicate changes clearly to all employees from the start and throughout the process. This provides transparency across teams and enables results to be evaluated and processes to be iterated on.
By modernizing the procurement process, businesses can gain greater visibility, control spend, and reduce risk. These five steps will help organizations overcome procurement challenges and achieve a competitive advantage in today's rapidly evolving business landscape.
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