If you had followed our previous article, you would have understood the structure and key elements of Procurement. Now when you are ready to implement a new procurement function, a key question is the resources that are needed in the new function and its scope. In other words, “What is the size of the problem?”
Continue reading “Indirect Spend And Potential For Procurement”
In our previous article, we highlighted the difference between Direct and Indirect Procurement. Professionally managed indirect procurement has grown in importance in the last 15 years or so. For organisations who implemented such an initiative, the result was a convincing one. In this article, we introduce Procurement as a business function for organisations who have yet to embark on the journey. It is best to keep in mind that the Procurement function should act as the focal point for an organisation to interact and work with the supply or selling markets; synonymous to the Sales and Marketing functions who act as the channel to the customer or buying markets.
Mention “Procurement” and the act of placing orders for required business goods and supplies come to mind. As a business function, Procurement is one of the most understated functions, being perceived more of a supporting back-room function than a strategic one. And most of these perceptions have to do with the fact that many of us consider ourselves as “experts” in procurement, being able to handle with ease our weekly shopping and scouring the best deals for electronic gadgets from the numerous online marketplaces. However, the role of Procurement in a modern organisation needs to be addressed differently from our personal and private experience.