Why Procurement Needs to Change

In procurement, there are long-standing practices that no longer serve the best interests of organizations or their teams. As the landscape changes, so too must the approach to procurement. Here are three critical shifts that procurement professionals need to make to drive true value and innovation in their organizations.

1. Stop Celebrating Firefighting – Start Valuing Proactive Planning

In many procurement departments, there is a culture of celebrating those who are constantly putting out fires—handling crises as they arise, day in and day out. While it's commendable to address issues quickly, this reactive approach shouldn't be the norm or the goal. Instead, the real value lies in preventing these fires from occurring in the first place.

Procurement professionals who anticipate challenges, plan ahead, and develop strategies to mitigate risks should be the ones celebrated. For example, during the COVID-19 pandemic, some procurement leaders anticipated supply chain disruptions and took proactive steps to secure critical materials in advance. This foresight allowed their companies to maintain operations and even gain market share, while competitors struggled. The focus should be on fostering a culture of strategic thinking and problem-solving before issues arise.

2. Move Away from Rigid Processes – Embrace Agility and User-Centric Design

Traditional procurement processes have often been rigid, designed more for the convenience of procurement and accounts payable (AP) departments rather than the end users they serve. This needs to change. The future of procurement lies in creating processes that are not only streamlined and efficient but also flexible and centered around the needs of the users.

With the advent of new technologies, there is an opportunity to develop procurement systems that function like Netflix – customized, intuitive, and constantly learning from user behavior. Procurement orchestration tools can help create processes that are adaptive, user-friendly, and aligned with the overall business goals, rather than just the needs of the procurement department. This shift towards agility and user-centric design will improve efficiency and satisfaction across the board.

3. Expand Beyond Cost Savings – Deliver Comprehensive Value

For far too long, the primary metric for success in procurement has been cost savings. While saving money is important, it's not the only value that procurement can bring to an organization. It's time to shift the focus to total value, which includes not only cost savings but also factors like innovation, market share growth, sustainability, and risk management.

Procurement leaders should advocate for a broader set of metrics that reflect the true impact of their work. For example, by project managing new product launches or driving sustainability initiatives, procurement can contribute to revenue growth and brand reputation – benefits that go far beyond mere cost reduction. Educating the C-suite about these broader metrics and consistently demonstrating the full spectrum of value that procurement delivers will help elevate the role of procurement within the organization.

Final Thoughts

These three shifts—prioritizing proactive planning, embracing agile and user-centric processes, and expanding the definition of value—are essential for the evolution of procurement. By adopting these changes, procurement professionals can ensure that they are not just meeting immediate needs but also driving long-term success for their organizations.