What is procurement? (Video)

Video

 

Purchasing policy provides structure for purchase

Procurement is more than operational control of the purchase. Organizations that use procurement properly can actually add value to both internal and external processes. It is about influencing and negotiating, building the relationship with key stakeholders and suppliers.

As a buyer, you must take into account the organizational wishes of the company and the interests of suppliers. The main factor is to buy cost-effective without quality loss. You must negotiate and conclude contracts with customers.

Why is procurement of added value?

Strategically approaching the purchasing policy ensures that the purchasing of goods and services is not based on a gut feeling, but deliberated and calculated. Work with preferred suppliers so you can negotiate better deals – such as discounts or faster service.

Such agreements are aimed at minimizing maverick buying, which happens when a department independently purchases items without incorporating the purchasing department. Maverick buying is a waste of financial resources, not a sought after strategy for any organization.

A buyer already adds great value to the organization by working with preferred suppliers. But you can go one step further.

How can software help create extra added value?

Managing those contracts can be a hassle. As a buyer you may be dealing with hundreds of contracts a year, which must also be retained. You can probably imagine the laboriousness. That’s why software is a savior. The right tool can readily be integrated with various administrative processes.

Proper purchasing software can assist with digital purchasing, contract management and much more that would otherwise be a manual task. Integrating these processes make real-time budget monitoring possible, visualizing current and future budget remnant once all invoices are paid, never leaving you in the dark.

This makes purchasing even more strategic, and the purchasing department more valuable.

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