Procurement Best Practices for 2021

Procurement best practices
Procurement is such a vital function for every company, small or large. As a company looks to develop and provide key services and grow the business, the procurement process plays a vital role in helping the business acquire the resources and tools needed to deliver exceptional outcomes to their customers.

In this blog, I will share the best Procurement Best Practices for 2021 that we follow and the work we do with our clients. These are some guiding principles you can use as you look at ways to improve and optimize your procurement operations to uncover new efficiencies with clarity of roles & responsibilities for both your internal and vendor stakeholders.

Here are the top procurement best practices which help transform your procurement operations and ensure success:

Document Your Procurement Policies and Procedures

It is important that you have in place a clear and concise policy detailing the rules of the road for your organization along with accompanying documented procedures which provide an efficient and consistent approach to ensure all stakeholders are consistently performing their responsibilities.

Without this, you will most likely experience inconsistent outcomes and have little control or predictability about future performance you are seeking to achieve not to mention you will be open to unmeasured risks that could cause a negative impact on your customers, your growth and your profits.

A few highlights:

• Use clear, concise and simple language that your staff can actually understand
• Create policy statements that specifically address the rule, and procedures that direct the implementation of activities
• Reference forms, templates, checklists and other tools that staff should use
• Identify roles and responsibilities to eliminate confusion
• Assign an owner to maintain and continually refresh your procurement policies, procedures and documents

Ensure Procurement Is Fully Aligned in Your Vendor Lifecycle Management

While procurement is in many cases viewed as a stand-alone function, it is important to approach it as an integral component of your Vendor Lifecycle Management program. Recognizing the vital role procurement can play in your ongoing success, it is important that your procurement process takes into account things like:

• Vendor risk assessments and due diligence to identify inherit risks and remediate them in advance of signing a contract
• Align contracting standards with your procurement and risk management policies ensuring you establish the onboarding, risk, compliance, oversight, performance and offboarding requirements in your contract to create full clarity and accountability with every vendor

Align Procurement with Environmental Sustainability and Supplier Diversity

Given the continued evolution and challenges facing our world today, procurement can’t be misaligned with the overall organizational culture and underlying principles. As most companies today are embracing their role as responsible corporate citizens, ensure that your procurement operations are aligned as an organization and your vendors fit within your corporate principles.

As example, if you have a corporate policy that provides a framework around environmental protections, you need to ensure you clearly incorporate this into all of your procurement documents and solicitations. Having a vendor that operates like it is 1970 when your company is striving to be a role model of environmental responsibility will create disfunction and disruptions that could cause harm to your corporate reputation.

Similarly, when it comes to social responsibility the same issue arises if corporately you are working to embrace social responsibility and equality yet you are working with a vendor population that doesn’t represent the diversity that is present in our broader society.

Embracing supplier diversity is not only the morally right thing to do it also opens your organization up to uncovering innovation and a broader perspective that will fuel your growth and success.

Implement New Tools and Technology

The most important and strategic procurement your company can do is to search the market, purchase and implement a new procurement system to make your procurement operations future-ready. Digital procurement activities limit repetitive and manual aspects of procurement, freeing up your procurement team to focus on strategic initiatives.

As technology continues to evolve, leading companies are looking at digital transformation for procurement operations going into 2021.

In Conclusion

To summarize, these best practices outline a range of critical considerations and practices your company can embrace as you look to move your company forward. The best place to start is by doing a high-level assessment of your current procurement operations and look to identify key areas of weakness or inefficiency that need your attention. Hopefully these best practices give you some things to contemplate and a few ideas of things you can do to prepare your procurement operations for 2021 and beyond.

Whether you need assistance in assessing your current procurement processes or want to explore having components of your procurement process outsourced; Check out our services here. We are to help!!

Author:

Job Title: Director of Business Development & Client Success
Organization: Vendor Centric

Paul is Director of Business Development; Client Success for Vendor Centric. He is responsible for Client and Partner engagement, development and success. His work ensures all of our important stakeholders get optimal value from our Third-Party Management advisory services and software.