One of the reasons that procurement has moved into the corporate spotlight in recent years is because more organizations are realizing the direct impact it can have on profitability. Thanks to that direct impact, companies are putting a lot of focus on ensuring that the fundamentals of procurement are being handled in the best way possible. Although it’s frustrating for a company to learn that suboptimal procurement practices have been costing them money for an extended period of time, the upside is that once these issues are addressed, a business can get on the right track and stay there as they continue to move forward.
When a business starts looking into their existing approach to procurement, one question that often comes up is what fundamentals need to be in place in order for everything to operate as efficiently as possible. As we’ll see shortly, there are actually several answers to that question. The link that ties them all together is the need for them to be manageable and scalable. While best practices are important, they only have an impact when there is a reliable way to utilize them daily.
Purchasing Software is the Best Way to Optimize Procurement
Since most procurement departments can tell stories about things getting off track despite having strong guidelines in place, purchasing software is a welcome solution for small and mid-market businesses. What makes this kind of software so powerful is it can take the procurement practices your business wants to follow and ensure that they are in place on a daily basis. And because this type of software is so easy to use, your entire business will be able to enjoy both optimal procurement practices and maximum productivity.
Because this type of software has the ability to deliver very big benefits, many people want to know exactly what kind of features it offers. The first key feature is the ability to automate purchasing processes. Not only do customized work flows greatly increase efficiency, but they also eliminate the need for procurement departments to use large amounts of paper.
The second important feature of purchasing software is being able to set and actually enforce budget thresholds. Instead of constantly being distracted by maverick spending, purchasing managers using quality software can focus on the tasks that will have the biggest impact on their company’s bottom line.
Several other features worth mentioning are the ability to use this software without IT support, having access to historical data to leverage vendor pricing and excellent usability that makes it easy to get everyone within a company to start using the software. The combination of all these features is why purchasing software is a great fit for any company that wants to enable procurement to play a direct part in growth.To see all the features we just covered in action, be sure to head over to our Free Live Demo page or sign up for a 30 Day Free Trial- no credit card needed.
In the current business environment, purchasing professionals need to have a variety of skills. One set of skills that can greatly benefit these professionals is the ability to sell. While purchasing pros obviously have different job requirements than salespeople, there are definitely some skills that the former can learn from the latter. Here are the sales skills that individuals who do purchasing can benefit from utilizing:
When a sales professional is interacting with a potential buyer, they’re not going to let the conversation drag on forever. Instead, sales pros know when it’s time to close the deal by asking for the sale. Although taking the initiative to close a deal can feel uncomfortable, it’s something that has to be done. So when someone in purchasing knows that an option is the best one to take, they should have the confidence to make that clear to all other parties that are involved.
Clearly Conveying Benefits
One of the traits that sets sales professionals apart from amateurs is that the former group focuses on the specific benefits that a product or service has to offer. While features are definitely important, benefits are what ultimately sways people to make a purchase. This lesson can be very beneficial to purchasing managers and team members who remember it. Whether it’s a fellow employee or another stakeholder, focusing on the benefits someone will receive can be useful in conversations ranging from specific purchases to why they should get on board with certain procedures.
Eliminating Discomfort from Discussions About Numbers
Numbers aren’t something that people always want to talk about. However, in order for a procurement professional to do the best job possible, they need to be able to negotiate prices. That reality is why those in purchasing should look to salespeople for guidance on how to best address the subject of numbers. Not only are great salespeople able to bring up the topic of numbers without making anyone uncomfortable, but they’re also able to frame them in a way that is beneficial to what they’re trying to accomplish.
Framing Conversations Around Value
This ties into the previous point about how salespeople are able to frame numbers in a way that is useful to what they want to accomplish. When a salesperson talks about what someone is going to get out of a product or service, they know the importance of communicating the direct value that individual is going to receive. While the subjects being discussed are going to differ, purchasing managers should take the same approach. By framing conversations around direct value, everything from vendor negotiations to enforcing budget thresholds becomes easier. The reason everything will become easier is because discussing value gives the other parties involved a clear reason to get on board with what a purchasing manager wants to do.
When a company discovers that they’re either purchasing something significant in an unstructured way or the need arises for a new category of purchases, it’s common for multiple suppliers to be evaluated. During the evaluation process, everything from best price to expected reliability will be taken into account.
Businesses rely on software more than ever before. The reason that modern businesses are so heavily invested in using software is because it can provide levels of productivity that wouldn’t otherwise be possible. While organizations use a mix of general software, there are also plenty of pieces of software that are made for specific departments.
Sales, operations and finance are all areas of a business that commonly use specialized software. In fact, these departments have been utilizing various forms of software for quite some time. Although there’s a lot of value in matching sales, operations and finance with the right software solutions, it’s important to understand that they’re not the only areas of a business that can benefit from specialized software.
As the role of purchasing continues to expand and grow, it’s easy to get caught up in all of the latest trends. While there is definitely value in knowing what’s new, it’s now more important than ever to have a really strong grasp on the fundamentals of effective purchasing.
The reason that fundamentals are so important is because many organizations are looking to enhance their purchasing through efforts like automation with purchasing software. Since automating different tasks can provide a major boost to what’s currently being done, it makes sense for companies to explore the different options that are available.
However, the key thing to remember is if there are currently processes in place that aren’t optimal, automation isn’t going to magically solve them. So before a company can reap the benefits of things like automation, they need to ensure that purchasing is being done in the best way possible. That’s where the three cornerstones of effective purchasing come into play:
Whether you’re speaking to a purchasing professional or someone in another department of an organization, most people agree that the role of procurement has noticeably expanded in recent years. One of the reasons that procurement has changed is because companies have realized that when handled correctly, procurement can have a noticeable impact on a company’s bottom line.
While purchase managers have more on their plate than ever before, that doesn’t mean training has kept up with the demands of this job. A common theme across companies of all sizes is that the current training for procurement just isn’t reflective of what’s required of this type of job on a daily basis.
It wasn’t that long ago when most forms of automation were only accessible to very large companies. But thanks to all the rapid advances in technology that have brought costs down over the years, businesses of all sizes can benefit from automation. One area where automation can be very helpful for small to medium businesses is with purchasing. Specifically, a more automated purchasing process can help take a business to a new level of efficiency. Not only will this help save time for everyone who is involved, but it’s also a proven way to help keep costs at an optimal level.
How can a business start transitioning towards an automated purchasing process? That’s exactly what we’re going to answer in this post, so be sure to keep reading:
Throughout the public sector, there is a lot of pressure on departments and individuals to save money. Although the mandate to save money is clear, it needs to be accomplished without degrading the quality of goods or services that are delivered. This combination creates a procurement challenge that is quite significant. As a result of that challenge, there is a very real need for purchasing managers who have the right mix of experience and skills.
Of all the areas within a company that are susceptible to fraud or corruption, the supply chain is one of the most prominent. Whether it’s questionable rebates or potentially troublesome relationships with vendors, there’s no way to eliminate the possibility of these issues with 100% certainty. Companies that take a proactive stance on procurement fraud and corruption will be in the best position to deal with it.
Understanding the Dynamics of Fraud and Corruption
Although these words have very loaded meanings and either action can be very complex in the way that it’s carried out, the dynamics at the core of these issues are often surprisingly straightforward. In many cases, pressure, opportunity and rationalism are the only three factors that need to be present in a business environment for fraud to occur.
The easiest way to fully understand this issue is to look at a realistic example. Given that many companies are still facing various financial challenges, individuals may feel pressure to either deliver specific results for the organization or to secure their own financial well-being. Unless the right controls are already in place, it’s often surprisingly easy for people to carry out actions related to fraud or corruption.
And if someone is facing what they view as overwhelming or otherwise pressing circumstances, it’s very likely that it will be quite easy for them to rationalize their decisions. But just because someone feels that they have a justifiable reason for taking a specific action doesn’t mean that it will turn out okay for the company.
Reactions to Procurement Fraud and Corruption
In the event that fraud or corruption does occur within an organization, they have to decide how they’re going to respond. Unfortunately, many companies take a less than ideal approach upon discovering this type of problem. Even though this type of issue can cause major damage for a company’s reputation, many companies shield the responsible parties from any significant consequences. The big problem with that approach is it sends the wrong signal to the rest of the company.
Preventing Major Issues Related to Purchasing
While figuring out the best way to deal with the discovery of fraud or corruption can be a tricky issue, minimizing this risk doesn’t have to be complicated. Instead, there’s a fairly straightforward way to put the necessary controls in place to curb this kind of activity.
With purchasing software, things like poor record keeping that create an easy opportunity for fraud are eliminated. Because PO software centralizes all purchasing activity and offers controls for things like budget thresholds, it provides safeguards that simply aren’t possible with a manual purchasing system.
Not only can quality purchasing software minimize the risk of fraud, but all of its features will make this department far more efficient. Bellwether Purchasing Software offers this minimized risk of fraud as well as opportunities to increase efficiency within the purchasing department. Contact us today to learn more.
Although the economy has been performing considerably better in recent years, that doesn’t mean that conditions are perfect. Since numerous companies are still facing a variety of challenges, they’re looking at many different ways to help strengthen their bottom line. One of the ways that more and more companies are looking at is through purchasing. While purchasing used to be viewed as a necessary business task instead of one that can boost margins or drive growth, that perception is rapidly changing.
The Role of Purchasing
At its most basic level, purchasing finds ways to optimize costs. It then communicates those savings with the rest of the organization. And as purchasing departments become more sophisticated and empowered, they’re able to deliver even greater value to organizations. Managing large offshoring operations, enabling new processes to be introduced and negotiating huge contracts are a few more examples of how purchasing can have a direct impact on a company.
Even though purchasing is a dynamic field with a bright outlook, there’s currently a shortage of talented individuals entering it. Not only is the demand for purchasing professionals already in place, but companies are willing to pay very attractive salaries for people who can deliver results.
For younger employees, another very appealing aspect of a purchasing career is the ability to be exposed to senior level stakeholders. Within weeks, there’s a very good chance that a new purchasing employee will be interacting with senior stakeholders. This is great for learning and potentially opening all kinds of doors.
It’s also worth mentioning that in most organizations, advancement within purchasing is something that’s driven by actual performance instead of politics or seniority. If you’re the type of person who wants to let your work truly speak for itself, you should strongly consider a career in purchasing.
Purchasing Challenges and Solutions
Another very appealing trait of a purchasing career path is it offers an opportunity to engage with a wide range of sectors. Having this kind of rich cross-industry experience is something that’s very valuable for building a strong career.
On top of that, being in this line of work means that you will really develop your technology skills. In fact, a purchasing career can enable you to set the course of your organization’s use of technology. For example, if you discover that their purchasing process is being held back by manual roadblocks, introducing purchasing software such as Bellwether Purchasing Software can be a game changer. You will want to research purchasing software and be sure to choose one that is capable of customized work flows and automating purchase orders, invoices, and inventory. Fully utilizing the right purchasing software will maximize the results driven by purchasing.
So whether you’re a new graduate or have decided that you want to steer your existing career in a new direction, a purchasing career is definitely an option that’s worth your consideration.