The concept of Procurement with Purpose is rapidly gaining traction among CEOs in the business world. It represents a shift away from traditional procurement strategies, where cost and efficiency are the only factors driving decision-making. Instead, it focuses on making sure that the products and services purchased directly contribute to the company’s overall purpose and values more fitting for a decarbonised and fairer economy. In other words, it has an eye to long-term value creation for the company, its stakeholders and the planet.
In these tough economic times that we’re all experiencing it can be difficult for CEO’s and their boards to make decisions about which projects are worth pursuing. Every department striving to protect their role puts forward a case to protect their projects. Here, your highly skilled and knowledgeable procurement team can be an integral part of ensuring that project decisions are informed and have a high return on investment (ROI).
Procurement professionals apply their skills to fully evaluate projects based on multiple factors such as cash flow, pricing structures, quality of products or services offered, supply availability, and more. Additionally, they can ensure that any agreements reached with third parties will not create unnecessary financial burdens in the future.
Overall, Procurement with Purpose encourages companies to go beyond simply meeting their short-term goals to ride an economic storm. Instead, procurement professionals focus on cultivating long-term relationships with the suppliers who share their values and objectives while also creating meaningful value in all aspects of their activities. Yes, this does mean investing more time upfront into researching potential partners prior to entering into an agreement. This means you can be confident that the procurement team are getting the best deal possible for your organisation while simultaneously contributing positively towards achieving shared goals. That’s why we’d strongly recommend CEOs and CFOs talk to their experienced procurement team. The procurement team are at the core of your business – interacting with every department - so they fully understand how to effectively manage stakeholders through collaborative planning and communication strategies.
Ultimately, by adopting a ‘Procurement with Purpose’ approach CEOs can ensure that every investment made is one that adds real value over time rather than just being focused purely on minimising costs during economic slumps.
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Read more about modernising Procurement in Fixing the broken procurement system