5 Emerging Challenges for your Procurement Department

5 Emerging Challenges for Your Procurement Department

There’s no point beating around the procurement bush. When it comes to business challenges, we’re all in this together. The goal of our procurement department is to continually work to reduce costs while ensuring we can source business-critical goods and services.

That crucial mission is still at the core of what we do. But the transformation and growing recognition of procurement as a strategic business function means that now we’re responsible for a great deal more.

The modern business environment is so complex that it’s sometimes hard to untangle your POs from your P&L. But we’re not going to get stuck on the bottom line today. Let’s explore 5 emerging challenges for your procurement department.

Our connected world means understanding reputation and brand image are vital to a successful business. No area of an organisation is exempt, and that certainly goes for procurement. Business transparency and reputational oversight must be a crucial consideration in how we conduct ourselves from day to day.

This kind of challenge is maybe nothing new to procurement. Scandals around child labour, hazardous supplier working conditions, and even slavery, have created pitfalls for safe, ethical procurement across many industries. What is changing is the access to information by both the public and our procurement departments that can have real impact on business reputation.

Reputational risk isn’t the only risk inherent in our procurement function. Supply chain resilience and process challenges are a key consideration. It’s essential to ensure that important supplier relationships remain resilient to market shocks. With volatile and increasingly international markets impacting even the most domestic procurement function this is a growing problem for any business.

It’s important to regularly evaluate and understand the points of risk in our wider procurement practice. Understanding, managing and creating action plans around key business risk is vital.

Sustainability no longer just applies to the resilience of our supply chain. Businesses are increasingly looking to understand and reduce their company-wide environmental impact. Procurement provides a vital strategic step to help manage everything from water use to the carbon footprint of end-products.

With sustainability being an increasingly strategic consideration for consumers as well as organisations, appropriate oversight and management of supply chains and processes is an important emerging trend for procurement departments to consider.

Relationship management has always been vital to procurement professionals. We’re constantly working to maintain and build key supplier relationships. With the advent of digital tools and growing mobile connectivity, this relationship management has taken on an increasingly digital level

Evaluating your business relationships and communications to leverage the most recent digital opportunities must go hand-in-hand with understanding the changing expectations of clients and suppliers.  

Technology takes us full circle from the emerging considerations above to the underlying goal of reducing costs and creating a more efficient business. Digital and technological innovations provide a huge opportunity to improve your procurement department. Procurehere’s e-procurement solution is just one example of a connected, cloud-based innovation that can deliver real savings for procurement.

The realities of e-procurement are just one key consideration around the huge sector of emerging technological innovations we’ll be expected to understand in coming years. From e-procurement opportunities to the robot revolution and connected internet of things, technology is an increasingly important aspect of an efficient procurement function.