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Strategic Procurement Alignment – Pitfall Avoidance 101

by | January 22, 2018

Achieving procurement excellence should be every company’s dream, as it can help transform a business into an effective organisation and revenue generator. Although, this sounds ideal, if not handled properly it can also turn into a company’s nightmare.

Integrating with the business strategy

This is why we believe it is of utmost importance for businesses to align their procurement function to the overall business strategy. You could have the perfect stand-alone procurement function, if it is not build around the overall purpose of the business it will have small to no impact on its performance and it can also be a cause of distress.

Building its own purpose

After understanding the company’s needs, procurement needs to build its own primary purpose, which is agreed and understood by all its stakeholders, as an integrated part of the company’s mission. Having a clear purchasing strategy can help the business get major competitive advantages.

Dealing with pitfalls

Reality is rarely ideal and many organisations fail to take into account all the pitfalls that might come up when aligning their procurement system to the company’s strategy.

It can be something as simple as getting the stakeholders on board with the strategy or clearly communicating it, that can get in the way of a strategically aligned procurement function.

Another major pitfall can come from wrongly aligning procurement’s competitive priorities in order to support the business strategy.

Is the right direction being kept?

Although the set-up phase is vital, monitoring your progress and making sure that everything is heading in the right direction is as important. For this we need to have well established KPIs that will constantly check that the organisation and its procurement function are aligned and following a common business strategy.

What your stakeholders really think

From employees to customers and suppliers, the business needs to take into account what the key stakeholders think about the procurement function and how it helps them achieve the business’ purpose with as few obstacles as possible.

Strategic alignment is just a small step in achieving procurement excellence. There is more that needs to be considered for organisations to achieve this.

– You can read more about this topic in our “7 Steps to Procurement Excellence” eBook.

– If you have any questions, our team of consultants would be more than happy to answer them. You can leave them a message here: [email protected]