Today, most large enterprises have a commanding and extensive team of individuals based all around the world, helping to reduce the cost of goods & services and take control of their supply-chain. The value of Procurement to support the bottom-line is well understood, with quality control and risk management seen as key objectives of the function, it has quickly become one of the fastest growing professions in the last 5 years.
The charity sector is also seeing this trend with many larger charities starting to benefit from effective procurement. They are achieving better value for money, whilst also helping to mitigate against reputational risk and brand damage which can often arise through poorly negotiated contracts and ineffective supplier management.
However, there are many businesses and charities still questioning whether they can afford to establish in-house procurement teams or if the outsourced solution provides better flexibility and represents lower long-term investment.
The advice we often give is to simply start the journey, get out of the blocks. Initially do not over complicate your buying objectives but gain some clarity over existing behaviours and processes. Give it go.
Where to start….
All strategic procurement should with start a need or requirement. The best way to save money is not to buy in the first instance; if you do, do not over engineer a basic requirement. If there is a need or requirement, then this should be fully scoped out, with all stakeholders involved, with both needs and benefits clearly defined.
Do your market research; technically & operationally. Understand what is available across the market and your sector trends. If you don’t know, it’s ok to ask! Speak to those in the know, your incumbent, other organisations and new suppliers. Many suppliers are willing to help (sometimes a little too enthusiastically) so take full advantage of their generosity and time.
Once you have a clear and concise understanding of your requirement and identify potential suppliers you trust on a short-list, give them the opportunity to impress you. Don’t assume an incumbent will be able to read your mind, make the same effort you would with new suppliers and equally don’t be lulled into a comfortable relationship – it’s ok to challenge them.
Work with potential suppliers to develop the solution or service further to suit your needs and deliver the desired benefits. Be consistent with each supplier to compare their products accurately and take the opportunity speak to their existing customers. Be prepared in advance to understand the difference between what you need and what might be on the ‘nice to have’ list. Focus on the requirements you defined right at the start.
Have the potential suppliers understood the challenge, not just sold their product? What is their knowledge of your organisation like? Can they be flexible with your changing needs over time? Can they demonstrate their performance through SLA’s and KPI’s. Moreover, do their ethics, visions and culture match your & ambitions for the future
Don’t dither and procrastinate. You’ll only delay the potential benefits and harm your organisation or a potential relationship with a supplier. Its important that the supplier fits with your culture, ethos & ethical framework and don’t forget to complete due diligence on your chosen supplier before you sign the contract.
Ensure you fully understand what you have agreed to and maintain an active role during its life-cycle. Watching over the contract and any subsequent service(s) will help you when it comes to renewals and future decisions about that supplier. Build the relationship and move key suppliers into a strategic partnership role – these embed speed, flexibility and a ‘results culture’ into the relationship.
Procurement matters, the process guarantees an organisation’s purchasing is competitive, impartial, and built upon its needs and requirements. It should deliver more than just value for money or cost reduction and be an integral and valued part of any organisation.
At Novo-K we love this diligence - we know that makes us distinct – and driving the right supplier strategy for the unique needs of each and every organisation can deliver surprisingly simple and large returns. If you are struggling with procurement issues, then please contact us today firstname.lastname@example.org / 0800 002 9025.