Since the onset of COVID, many companies have increasingly realised the importance of their procurement division. 85% of Ivalua’s survey respondents demonstrated that executive leadership recognises the role procurement has in driving revenue.
COVID has led procurement to become an increasingly strategic and resilience focussed area. Although, firms are finding that an ageing technology structure can inhibit their growth. Some of the key trouble areas are overly dispersed data, unactionable data and a lack of embedded best practices.
A more positive element of COVID was that is helped firms expose deep rooted weaknesses in processes and practices specifically in data quality and management. Effective management of stock/inventory is critical for managing supply risk; therefore, the data that runs this management needs to be high quality and reliable. Poor data quality and substandard tools can lead to issues such as lost orders, revenue loss as well as reduced margins. There can also be a significant effect on cash flow.
Procurement strategies can help a company restore growth after a decline. One way of doing this is through improving the flexibility of the supply chain as well as reducing production costs whilst retaining quality. Another effective strategy is to improve the amount of supplier led innovation such as leveraging tech to improve information and data sharing. To effectively implement procurement strategies that promote growth, a firm needs to effectively engage with stakeholders from the outset, this can help the firm to identify potential new revenue streams as well as utilising the best technology.