Six keys to revolutionize the Purchasing Department

The technological advances experienced in recent years have brought about a radical change in all aspects of our lives. The purchasing departments of companies around the world are no strangers to these advances that have begun to be incorporated to optimize corporate processes. Artificial intelligence, process automation or experiences similar to e-commerce will be determining factors in the transformation of the Procurement area.

Specifically, the Purchasing department has started a transformation from being an area focused exclusively on cost savings to become a strategic agent that brings real value to the business;strategic agent that brings real value to the business, forming an essential piece in taking care of the prestige and reputation of the organization.

The concepts of innovation, digitization, collaboration, globalization and sustainability can be seamlessly applied to purchasing processes. In fact, this department can be one of the most benefited by applying these terms, since investing in the purchasing department can improve the Ebitda even more than investing in commercial processes.

These are the six trends where procurement departments are headed, according to technology consulting firm Stratesys:

1. Data-driven decisions.The decision-making model has undergone a transition from a more "gut" model, centered on intuition, to a more analytical, data-driven one. To achieve this purpose, companies could implement spend analysis tools that incorporate elements of business intelligence and big data, to determine which data are relevant to provide an integrated view of the business.

2. Apply Artificial Intelligence throughout the supply chain. The application of Artificial Intelligence to purchasing logistics, production logistics, distribution logistics or reverse logistics will be a key competitive element in the coming years. Investing in intelligent management models will enable teams to make reliable predictive analyses, which will allow them to anticipate potential problems that may arise on a day-to-day basis.

3. Experiences similar to e-commerce. Offering solutions to business areas based on technical purchases through catalogs and guided purchases streamline and automate requests, thus avoiding the intervention of the Purchasing department in processes that do not add value.

4. Extend strategic sourcing methodologies to the rest of the corporation. This step, through appropriate tools that facilitate the adoption and proper use of these methodologies, will bring savings and collaboration with suppliers, as well as transparency in the processes. Thanks to these methodologies, sourcing, procurement or supplier management processes are even more efficient.

5. Manage supplier risk with tools that monitor ethics.  Through these programs, Purchasing team members are able to monitor the ethics, good practices and reputation of the companies that supply products for their business. Thanks to these solutions, companies can also improve their environmental and social sustainability markers, vital today to meet, for example, the UN Sustainable Development Goals 2030.

6. Incorporate collaborative platforms for the control of external workforce contracts.

Thanks to these platforms it is possible to optimize and control the execution of contracts with third parties, generate savings in those already negotiated and verify compliance with safety regulations and access of external workers, thus avoiding unnecessary labor risks.

In addition to technological aids, it is necessary to incorporate different professional profiles that are multidisciplinary, autonomous, digital and intergenerational. In this way, procurement professionals go one step further, acquiring other qualities such as a greater knowledge of the market, a strategic vision of the business, more collaborative teamwork and an innovative spirit.