Simplicity in Procurement

Simplicity in Procurement

A reliable procurement system is designed for speed, efficiency and accuracy, and one of the best ways to achieve the intended design is to keep things simple. However, despite all precautions, problems ranging from human error to organizational shortcomings can still have a negative effect on procurement and purchasing ability, and the greatest issue plaguing procurement today is complexity.

The complexity in the procurement process is one of the main reasons why procurement has a diminished reputation today, as compared to previous years. The teams in the procurement community are aiming to help their business counterparts lessen and ease the pressure on their budgets, and making sure that standards like consistency and quality are upheld in their suppliers.

The huge problem is that no matter how hard procurement tries to ease the burden of companies, complexity is still a huge factor in the business. If procurement asks the company to use a specific software, or to fill out a form to make a purchase, that is an additional process that was not done before. In the old days, the mantra was: “Buy what is needed, when it is needed”. However, in today’s business, complexity in the procurement process is mounting, and the industry must work together to bring back simplicity as one of the core precepts for procurement.

The reasons to bring back simplicity in procurement:

1) Simplicity means speed

If the procurement team can prove to the stakeholders that working with them doesn’t slow things down, that can remove a huge amount of anxiety from the stakeholders. For stakeholders, the purchasing process shouldn’t be complex. Procurement may require intelligent solutions to manage suppliers and handle payments, but it should be kept as simple as possible. Simplicity in the procurement process frees up resources for value-adding activities, rather than consuming it.

2) Simplicity enables big ideas

In order to function better, procurement departments must understand their company’s concerns and be able to demonstrate how they measure up against these concerns. If the company’s requirement spans across different disciplines making it very complicated, the procurement department’s job must be to convert that complicated requirement into a simple one. Procurement must come up with simple ways and big ideas of measuring a requirement and then turning that into a strategy that takes the complexity away.

3) Simplicity means lean

No company needs to have thousands of suppliers. Procurement should learn to do more with less. The key to the future of procurement is deploying the most effective capabilities where they can make the most impact and automating everything else to keep operations lean and simple, without the unwanted complexity.

4) Simplicity is inevitable

The longer you spend creating a complex system, the more you consequently spend updating, rolling out and enforcing that system. Complexity breeds complexity and it’s only a matter of time until the complexity lessens efficiency and drives up costs immensely. Procurement is at its best when it can help stakeholders make a quick decision, rather than impose a lot of rules and forms that bogs the process down. The direction where procurement must go to achieve simplicity is stepping beyond the established automated purchasing setup and using data and expertise to enable strategic decision-making. This can be done with the help of sophisticated set of inputs and informed analysis that can help transform business complexity into a simple process.