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S curve and procurement: Key to innovation

by | January 25, 2018

  When talking about business growth and innovation people consider the S curve to be a good method to follow. The term was first used by Gabriel Tarde in 1903 and the process has been proposed as the standard life cycle of innovations. The 4 stages of the S curve are: startup – growth – maturation – discontinuity. The procurement department should be very involved and aware throughout all of these stages of the business. From the startup phase to the growth period and throughout the maturation and even in the last phase, procurement develops and matures with the business. But what often happens is that the procurement department does not support the innovative side of the business; moreover, it slows the process through old systems, actions and disorganizes purchasing. The procurement leaders should support the growth of the business and adapt their actions and methods. In its startup stage, a business does not usually need a complete procurement department, since it would only be expensive and rather pointless. The respective responsibilities in the first stage can be fulfilled by an office manager. It may take a few years before a complete procurement department is needed. Somewhere along the S curve growth, inefficiencies start to occur as each department’s needs for purchasing change and evolve. This creates an opportunity for the procurement department to start managing all the purchases and make them cost-effective.

Procurement needs to step up

In today’s world, companies face greater challenges and they are compelled to keep up with the newest technological developments. Therefore, there has never been a better opportunity for implementing a proper procurement process to help the business and step up.

Aligning with the needs of the business

The purpose of the procurement function has been to identify and procure goods and services that can provide a clearer image of the company profile. In recent years, businesses have increased their levels of focus on the cost base and the considerations around risk mitigation and management. They have identified, more than ever, the need for appropriate strategic partnerships and the indispensability of embarking on a journey of transformation and adapting to the needs of the business. The procurement experts need to align their services with what the company really needs at its particular stage, not the stage in which they think the business is. Innovation is key to a successful business and the procurement department, regardless of the number of its employees, should be involved in supporting and evolving together with the company. If you would like to know more, please contact our Consultancy team at [email protected]