10/2/2022 0 Comments How Procurement Transformation Can Help You Add Value To Your Procurement FunctionRecent events have left the global economy trying to recover from the impacts of a pandemic and Russia’s invasion of Ukraine offers a grim outlook for future economic growth.
With inflation rising at an alarming rate in major European economies, there are limitations in the global financial conditions. These challenges have paved the way for new opportunities and businesses must look to the future to develop bespoke solutions that can overcome them. Businesses must also acknowledge the fact that there is no one-size-fits-all approach that can solve any problem. They must approach each situation they face based on their own merits and also take into consideration whether they can mitigate these problems. The procurement function is one of the most impacted business functions, and businesses are trying to secure their supply chains to maintain a competitive edge over their competitors. With the challenges that contemporary businesses face, there is an urgent need to bring the procurement function to the forefront and add value through procurement transformation. So how does this transformation help you add value to your procurement function? Increases cash flow and profit margins Every business, irrespective of the industry, has a single goal: to increase cash flow and boost profits. Businesses depend on a steady cash flow to help them keep their business running and eventually boost their revenues and improve profit margins. When it comes to procurement transformation, this creates an almost immediate impact since procurement consists of a large portion of company resources that are dedicated to expanding supply chains, increasing sustainability, improving supplier relationships, making cost-effective purchasing decisions, and more. With procurement occupying a significant number of resources, the function plays a key role in ensuring that resources are allocated efficiently and that they are well within the financial and budgetary considerations. Transforming procurement into a strategic business function gives it the ability to become more impactful on other important business functions and drive profit margins and cash flow. Helps you gain a competitive edge As the world changes and adapts to a more technology-driven economy and marketplace, businesses are vying to stay ahead of their competition by establishing cutting-edge systems and processes. Joining the digital revolution may have been an option a few years ago, but today, it is no longer a question of it being a unique selling point—instead, it is a necessity. Many businesses that do not adapt to these rising technologies may be left behind if they do not welcome transformation. The procurement function is a key business function and has a lot to benefit from digitalisation. Adopting this key function can give your business the ability to select the right framework and digital systems for their function. Focuses on the future of procurement With the recent events that have made businesses warier of uncertainty, no doubt predicting emerging disruptions is becoming more difficult. These challenges are only magnified when considering the changing consumer priorities and market volatility. Procurement transformation can help you mitigate these risks by developing and maintaining a more future-focused approach that is based on resilience—a vital quality that any business in the contemporary business landscape must possess to survive in times of uncertainty and crisis. Businesses can also formulate short-term and long-term objectives in more strategic ways to ensure that both the procurement function and the business has everything they need to plan and add value to the function. How you can accelerate your business’s procurement transformation It is no secret that procurement has become a key driver of business objectives and the responsibility of executing these objectives falls on the shoulders of procurement leaders and teams. Transformation is a continuous process, especially considering the innovations that are taking over the marketplace. While having a transformation solution for procurement can be a definite advantage, businesses need a procurement framework that is both resilient and responsive to change. Whether it is developing a procurement transformation framework, a sustainable procurement function, accelerating Procurement 4.0, or procurement training, there are several ways that you can transform your procurement function to become more robust. The functions of the entire company depend on the smooth functioning of the supply chain and purchasing operations becoming even more instrumental in being the driving force behind the transformation. Investing in procurement and getting the right systems and frameworks to generate more advantages for businesses should be the priority of every business leader regardless of the size, industry, or objectives of the organisation.
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Kronos GroupKronos Group has been named one of the fastest-growing companies in Europe. We provide custom solutions from procurement and finance to project management. We support our clients with expertise in business transformation and operations consulting. Project Management |