How partnering with procurement will help you sustain competitive edge

Globalization has had a huge impact on how we conduct ourselves, particularly in our work lives. As a result of technological breakthroughs, there have been major improvements in transportation infrastructure, transforming the world into one global international commercial market. For both new and established entrepreneurs, the global market is ripe with opportunities. The stakes are high, and the risks of failure are considerable; how one manages these risks is a matter of strategic planning, budgeting, and execution.

Both suppliers and buyers benefit from a clear understanding of how best to capitalize on market opportunities. For example, a supplier can submit a competitive quote, the buying organisation receiving the quote will make a decision based on their budget allowance after following a fair and equitable selection process. Alignment in thinking and intended outcomes is how both parties involved make a success of the once-off or long-term business opportunity.

So, how do business enterprises secure a sustainable deal?

Understanding industry insights, its trends, and its financial proclivity is one of the numerous ways enterprises can guarantee that they remain top of mind when decisions are made notwithstanding awareness and gaining knowledge of the desired buyers’ strategic intentions. This chasm is bridged through procurement and the role it plays. Therefore, knowing the cost drivers and strategic initiatives becomes easier and more controllable when a co-dependent alliance is formed, thus budgeting and planning are made easier because the prices are aligned with the desired objective.

As a function, procurement adds value by assisting business to project costs for the next fiscal year, whether through market analysis or a review of the existing contract’s terms and conditions. With this rationale, how then can a business enterprise seek value from their relationship with a procurement professional while simultaneously expanding their organization in an ever-changing global market? Here are a few things to consider:

1.    Understand the market: Keeping up with innovations and technology that make doing business easier is good to offer best-in-class service and delivery.

2.    Demand management: Managing the downstream value chain to mitigate supply risk.

3.    Budget accordingly: Align the budget with the business requirements, considering the Zero-Based-Budgeting (ZBB) methodology where applicable.

4.    Advisory council: Become a trusted business partner that can offer expert advice to the clients, nurturing the relationship to be mutually beneficial for the long term.

The next frontier

Understanding the strategic roadmap and the organisation’s needs is necessary to provide the groundwork for a possible one or five year contractual commitment. Collaboration, planning, forecasting, and negotiation are all necessary components of a healthy and effective procurement partnership. Growth can be sought in any situation; nevertheless, having a diverse customer portfolio is critical to establishing and maintaining a competitive advantage in the market. To build such a diverse portfolio,  business enterprises need to network with key partners who want to drive and achieve the same change and impact. Business enterprises will need to be smart and purpose-driven to capitalize on opportunities brought on by globalization and market trends, especially in the aftermath of a pandemic. Partner for long-term success!

 “The rule says to become world-class at anything, you have to put in 10 000 hours of practice. Practice isn’t the thing you do once your good. It’s the thing you do that makes you good” – Malcom Gladwell.

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