10 Key Procurement Goals to Achieve in 2023
As a procurement professional, your goal is to help your organization get the most out of its purchasing power while reducing overall risks to the organization. This is not an easy task. The key to being successful is setting the right procurement goals.
But what types of goals should you be setting as a procurement professional? Even though each business is uniquely different, there are certain guidelines you should follow to transform procurement into a more successful and strategic asset.
These 10 procurement goals will get you there.
Depending on your resources, the maturity of your organization, and leadership's attitude toward procurement, you may only be able to aim for a few of these. Or, you might be able to knock them all out.
Either way, accomplishing even just one of these goals will put your procurement process in a better place than it is right now. And that’s a big win.
1. Leverage More Technology to Reduce Costs and Waste
If you’re not (at the very least) automating certain aspects of your procurement process already, you’re behind. Setting procurement goals and achieving them requires time and resources. But if you’re running around manually approving invoices, you’ll be stuck running around putting out fires instead.
Luckily, investing in better systems doesn’t mean your business has to risk going broke on expensive procurement upgrades. Using low code, you can automate many of your procurement processes far cheaper and far faster than expensive custom builds.
Imagine this: A simple automated workflow that collects requisition orders, submits POs, collects approvals, conducts QA, issues invoices, and stores all the financial data for easier reporting and tracking.
This is not a pipedream. Nor is it a luxury only available to enterprise organizations.
By investing in process improvements, you can get the time, resources, and (most importantly) accurate data you need to reach other procurement goals.
2. Develop a Better Understanding of Your Supply Chain
How does your organization fit into the global supply chain? If you can’t answer that question, it makes it harder for you to prove to leadership that your department is a critical component to the overall success of your organization.
But it’s true.
Procurement is about more than cost savings. Was your business impacted by recent supply chain disruptions? Imagine what position you could be in now if you had the insights needed to adjust your supply chain before problems hit.
How much more competitive would your organization be right now if they had ensured deliveries while keeping costs low during that global disruption?
At a basic level, you can conduct a simple SWOT analysis on your procurement process and supply chain. You can also conduct environment scanning, analyzing customer purchase trends, technology shifts, potential political disruption, and other scenarios.
The more accurate data you have and the more time you have to analyze it, the better position your organization will be in. Instead of reacting to change, you can proactively shift your supply chain around to minimize risk and disruption.
3. Maximize Your Spend
There are a lot of different ways you can maximize spend in your organization.
Evaluate the cost of the goods and services you purchase against their quality to ensure that you’re not overpaying for goods. Or, paying less but purchasing more often…
And there are a lot of ways to reduce your overall spend as well. Are you getting vendor discounts (bulk order, early pay, etc.)? Are your purchases consolidated to reduce delivery costs? Is your tail spend under control?
By maximizing your cost savings, you’ll give your organization more resources to invest in better systems that make everyone’s lives easier.
4. Clean Up Your Data
Data is everywhere. But more isn’t necessarily better. And if you're tracking vital customer data across multiple spreadsheets and other data siloes, you most likely dealing with the information that’s simply wrong.
From overpaying vendors to misunderstanding customer needs, dirty data puts your organization at greater (unnecessary) risk.
Automating your procurement process helps consolidate your data. You can integrate disparate systems, reducing the need for spreadsheets. And you can transform your reporting into clear, accurate data dashboards that give you real-time insights.
5. Position Procurement to Support Overall Business Goals
Procurement should function as the backbone for your business goals. It's a strategic process. The data collected from the supply chain, vendors, and customers is critical to developing the strategies needed to guide a business to success. Not to mention, an organization’s purchasing power helps it remain competitive.
The more closely aligned procurement is with the overall mission of the business, the more leadership will lean on its procurement team for critical insights.
To make that happen, you need to collect the right insights.
Monitor markets and trends. Pay attention to pricing. Note any potential shortages of critical components. And share any potential risks or disruptions that could impact the supply chain. The more you can help your business see its place in the marketplace and identify any potential obstacles, the better your positioning.
These insights and support will help transform how your organization sees its procurement process. As a result, you can better position procurement as an integral part of your business.
6. Aim to Work with Leadership Earlier On
Leadership often takes a backward approach to procurement. They design a project, make promises to partners and customers, and build out roadmaps for completion first. After, they give their procurement department the task of getting it done.
This is the wrong approach.
It opens up the business to unnecessary risk. Leadership may overlook aspects of their supply chain or development, for example. They may overpromise on deadlines, features, or costs.
Additionally, it puts unnecessary pressure on the procurement team. Now, they have to figure out how to make it all happen while juggling other responsibilities.
Instead, push for a seat at the table early on in the project development cycle. Have the data and insights ready to share on your supply chain (vendors, pricing, limitations, etc.).
By working with leadership early on in the process, you’ll help ensure you’re meeting your customers’ expectations without overtaxing your vendors or going over budget.
7. Better Understand and Reduce, Eliminate, or Avoid Risk
Risk is everywhere in your supply chain. You can’t always avoid it. But you can understand it and mitigate it.
Nowadays, CEOs are more likely to lose their jobs due to unethical conduct than poor business performance. Ethical business practices matter more to customers now than ever before.
The same is true for sustainability. In fact, 61% of customers expect sustainable business practices. Going green isn’t a luxury. It’s essential.
It’s not just environmental and ethical risks you need to worry about either. Cyber security attacks on the supply chain are becoming more common.
Your goal should be to build out the systems, procedures, and data needed to analyze risk in your supply shain. Both internal and external.
8. Build Better Vendor Relationships
Building a network of mutually beneficial relationships with your vendors will ensure you remain competitive in an increasingly unpredictable marketplace.
By working closely with your vendors, you can reduce costs, improve the quality of your goods, and get more on-time deliveries. As a result, you’ll become a more dependable business for your customers. It’s a win-win for everyone involved.
Vendor relationship management is tricky. It starts by choosing the right vendors. Next, you need to set a baseline of KPIs to evaluate their performance. After, you'll work with them to ensure they meet those goals.
The key is to avoid adversarial relationships and instead focus on how you can work together to ensure everyone wins.
9. Adapt Procurement Best Practices
Is your procurement process best practice? Achieving best practice doesn’t happen overnight. You need to actively work at it over time.
You also need buy-in from leadership because they’ll need to invest in better systems to help streamline how purchasing happens in your organization.
Still, don’t feel the need to run out and try to adapt every best practice overnight. Instead, you need to be realistic. If you’re only adopting one or two best practices right now, aim to add one or two more by the end of the year.
But which ones do you focus on?
Aim for the ones that significantly reduce procurement costs. The more resources you can save your organization, the more they’ll have to reinvest in better systems that can further streamline purchasing.
10. Seek Out More Professional Development
Procurement is a complex business process that’s constantly evolving. Not only is your supply chain constantly changing, but you also have new disruptive technologies appearing every day. Additionally, you need to develop your soft skills as well.
The key to helping your organization succeed with its procurement process is to never stop educating yourself.
Take the time to learn more about new trends (socio-demographic, customer, ecological, political, technological, and more). Learn about new technologies like low code, automation, artificial intelligence (AI), Robotic Process Automation (RPA), and more. Don’t neglect your soft skills either: leadership, negotiation, communication, and more.
Make it your goal to be a sponge, soaking up everything you can about procurement. The more you learn, the more of an asset you can be to your organization.
See how we've helped our clients improve their businesses and get insane ROIs by checking out our case studies below.