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Balancing Act: Aligning Procurement Strategy with Overall Business Objectives

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Aligning procurement strategy with overall business objectives has become a cornerstone for achieving sustainable growth and competitiveness.

This ensures that procurement activities not only contribute to cost savings but also support broader business goals, such as risk management, innovation, and operational efficiency.

 

The Imperative of Strategic Alignment

The alignment of procurement with the overarching goals of an organization is crucial.

In 2024, procurement departments face the challenge of contributing to tasks like supply chain risk management, cost avoidance, and Environmental, Social, and Governance (ESG) initiatives.

Procurement strategies must be tailored to support the goals set by executive leadership and reflect the key objectives outlined in the organization’s annual statements.

This involves setting SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) objectives and ensuring that these objectives are specific and measurable over time, covering areas such as supply chain risk management, cost savings, business process improvements, and ESG goals.

This approach demonstrates the procurement department’s value to the organization and ensures the procurement function is in sync with the larger business strategy.

 

Harnessing Digital Transformation

Digitalization has become a pivotal factor in modern procurement strategies.

Digital procurement solutions, such as digital-tendering, heat maps, and e-catalogs, are transforming the way procurement departments handle non-critical items like C-Parts and tail spend.

These tools aid in reducing complexity, improving transparency, and enhancing the efficiency of procurement processes. For example, using digital tendering solutions can simplify the tender process, enabling procurement departments to handle a larger volume of items efficiently, leading to significant cost savings.

Similarly, digital tools like e-sourcing platforms and Robotic Process Automation (RPA) can accelerate sourcing and purchasing processes, thereby increasing the pace of procurement operations.

 

Aligning with Business Goals

Procurement must align not only with enterprise-level strategies but also with specific functional strategies such as finance, IT, and people strategies. This involves understanding the current business phase, whether it’s growth or consolidation, and aligning procurement activities to support these phases.

For instance, aligning with the IT strategy is crucial, especially during times of technological transformation in the procurement function.

Similarly, understanding the organization’s people strategy can help in planning the expansion of the procurement team in alignment with the overall business objectives.

 

The Multi-Faceted Benefits of Strategic Procurement

Strategic procurement goes beyond cost-cutting; it’s about creating value across the supply chain.

By implementing strategic procurement, businesses can achieve cost savings, improved supplier relationships, enhanced risk management, increased efficiency, innovation, and value creation, and focus on sustainability.

This multifaceted approach enables businesses to operate more effectively in complex environments, optimizing their operations and staying agile.

 

Risk Management and Innovation

Risk management and fostering innovation are critical aspects of strategic procurement.

Developing strong relationships with suppliers and involving them early in the product development process can mitigate risks such as supply chain disruptions and foster innovation by tapping into suppliers’ expertise.

This collaborative approach not only minimizes operational disruptions but also ensures timely delivery of goods or services while maintaining high-quality standards.

Strategic procurement positions organizations to stay ahead of the competition by effectively managing risks and encouraging creativity and knowledge sharing between all parties involved.

 

Implementing Strategic Procurement

Implementing strategic procurement involves assessing current processes, setting clear objectives, developing a comprehensive sourcing strategy, building strong supplier relationships, leveraging technology, and tracking performance metrics.

These steps ensure that procurement strategies are effectively aligned with business goals, leading to improved operational efficiency and long-term success.

 

Aligning procurement strategy with overall business objectives is not just a matter of operational necessity; it’s a strategic imperative that can drive significant business success.

 By embracing a holistic approach to procurement, organizations can navigate the complexities of today’s business environment, achieving cost savings, fostering innovation, and ensuring sustainable growth.

 

premikati sap ariba procurement

Mastering Procurement in 2024: A Quarter-by-Quarter Strategic Roadmap for Success

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An effective procurement strategy is more than just a way to cut costs; it’s a crucial driver of value and innovation.

As we step into a new year, let’s explore a comprehensive, quarter-by-quarter strategic roadmap that procurement professionals can leverage to elevate their operations, align with organizational goals, and stay ahead in an ever-changing market.

 

Q1: January – March: Foundation and Planning

  1. Assessment and Goal Setting (January)
    • Perform a granular analysis of last year’s procurement data, focusing on spending patterns, supplier performance, and compliance issues.
    • Collaborate with key departments to understand their procurement needs and challenges.
    • Set Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) goals that may include cost savings, process efficiency, and supplier diversity.
  2. Strategy Development (February)
    • Develop strategies tailored to different categories of procurement, considering both direct and indirect spending.
    • Incorporate risk management strategies, focusing on supply chain resilience and adaptability.
    • Plan for the integration of advanced tools like SAP Ariba, focusing on how they can enhance procurement operations.
  3. Implementation Planning (March)
    • Create detailed project plans, identifying milestones and key deliverables.
    • Develop training programs and materials for the procurement team and other involved stakeholders.
    • Establish a communication plan to keep all stakeholders informed and engaged throughout the implementation process.

Q2: April – June: Implementation and Optimization

  1. Process Implementation (April)
    • Start with a pilot program to test new processes in a controlled environment.
    • Establish feedback mechanisms to gather insights and make necessary adjustments.
    • Ensure compliance with both internal policies and external regulatory requirements.
  2. Supplier Relationship Management (May)
    • Develop a supplier segmentation strategy to identify key suppliers and manage them accordingly.
    • Initiate regular business reviews with key suppliers to discuss performance, opportunities, and challenges.
    • Look for opportunities to consolidate suppliers and negotiate better terms or bulk discounts.
  3. Performance Tracking and Optimization (June)
    • Utilize dashboards and reporting tools within SAP Ariba for real-time monitoring.
    • Conduct quarterly reviews to assess progress against goals and make adjustments as needed.
    • Foster a culture of continuous improvement, encouraging team members to suggest and implement enhancements.

Q3: July – September: Expansion and Innovation

  1. Market Analysis and Expansion (July)
    • Conduct thorough research to identify emerging trends and new market opportunities.
    • Evaluate the potential risks and benefits of expanding into new markets or product categories.
    • Plan for the integration of new suppliers, ensuring they meet the organization’s quality and compliance standards.
  2. Innovation in Procurement (August)
    • Explore emerging technologies such as IoT, robotics, and AI, assessing their potential impact on procurement processes.
    • Encourage the team to participate in industry workshops and seminars to stay abreast of the latest trends.
    • Pilot innovative procurement practices on a small scale before wider implementation.
  3. Strategic Sourcing Initiatives (September)
    • Reassess sourcing strategies to ensure they align with current market conditions and business objectives.
    • Develop partnerships with suppliers to foster innovation and improve supply chain sustainability.
    • Implement category management to optimize the procurement of goods and services across different categories.

Q4: October – December: Review and Future Planning

  1. Performance Review (October)
    • Analyze key performance indicators in detail, comparing them against industry benchmarks and historical data.
    • Solicit feedback from internal customers and suppliers to gain a 360-degree view of procurement performance.
    • Identify key learnings and areas of improvement to inform future strategies.
  2. Budget Planning and Forecasting (November)
    • Collaborate with finance and other departments to align procurement budgeting with overall business objectives.
    • Use predictive analytics to forecast future spending trends and procurement needs.
    • Plan for contingencies, ensuring flexibility in the face of market changes or unexpected challenges.
  3. Setting Goals for the Next Year (December)
    • Develop goals that not only focus on cost savings but also on value creation, sustainability, and innovation.
    • Plan for technology upgrades or implementations in the coming year.
    • Align procurement goals with the broader strategic objectives of the organization.

Comprehensive Checklist of Action Items:

  • Perform detailed procurement data analysis.
  • Set SMART procurement goals.
  • Develop category-specific strategies.
  • Plan and implement advanced procurement tools.
  • Conduct pilot programs for new processes.
  • Establish strong supplier relationships and management strategies.
  • Utilize SAP Ariba™ for performance tracking.
  • Engage in continuous process optimization.
  • Conduct market analysis for expansion.
  • Pilot innovative procurement practices.
  • Implement strategic sourcing and category management.
  • Conduct detailed performance reviews.
  • Align procurement budgeting with business objectives.
  • Set goals for technology upgrades and innovation.
  • Foster a culture of continuous improvement and learning.

 

By following this detailed roadmap and checklist, procurement teams can ensure a strategic, efficient, and value-driven approach throughout the year, ultimately contributing to the overall success and growth of the organization.

NSBA partners

CEO of Premikati Named to National Small Business Association Leadership Council

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Marisol Buchanan, CEO of Premikati, located in Indianapolis, IN was recently named to the National Small Business Association (NSBA) Leadership Council. NSBA is the nation’s oldest small-business advocacy organization, and operates on a staunchly nonpartisan basis. Buchanan, a recognized leader in the small-business community, joins the NSBA Leadership Council alongside other small-business advocates from across the country as they work to promote the interests of small business to policymakers in Washington, D.C. Additionally, Buchanan is a Council Member for the NSBA Technology, Economic Development, and Health and Human Resources Committees.

“As a small-business owner, I see daily the importance of being involved and active when it comes to laws and regulation,” stated Buchanan. “Joining NSBA’s Leadership Council will enable me to take our collective small-business message to the people that need to hear it most: Congress.”

As a WBENC certified, woman-owned small business operator and owner, Buchanan has more than 18 years of leadership and governance management experience. She is an active member of the National Association of Woman Business Owners, Women and Hi Tech, and the Indiana Chamber of Commerce. Buchanan volunteers her time to multiple community organizations to maximize the voice of small business owners.

Ms. Buchanan joined her NSBA Leadership Council as part of her efforts to tackle the many critical issues facing small business, including tax reform, regulatory restraint, health care costs and how the Affordable Care Act will impact small business. The NSBA Leadership Council is focused on providing valuable networking between small-business advocates from across the country while ensuring small business a seat at the table as Congress and regulators take up key small-business proposals.

“I am proud to have Marisol as part of our Leadership Council,” stated NSBA President and CEO Todd McCracken. “She came to us highly recommended and I look forward to our coordinated efforts for years to come.”

Please click here to learn more about Marisol Buchanan.https://www.linkedin.com/in/marisolbuczuynskibuchanan/

For more on the NSBA Leadership Council, please visit www.nsba.biz/leadershipcouncil.

About Premikati: Founded in 2009, Premikati, Inc. is a Supply Chain Business Process Outsourcing (BPO) firm, providing cost savings and financial, contractual and supplier risk mitigation services to purchasing organizations for mid and large enterprises while leveraging best-in-class purchasing processes and technology. Premikati has partnered with SAP and is one of only five companies globally to have been granted the most exclusive partnership level with SAP Ariba. Additionally, Premikati is now embarking two new lines of business; a national Group Purchasing Organization (GPO) for the K-12 education space and non-profits, and orchestrating a Minority and Woman Business Enterprise (MWBE) catalog of suppliers to support the swell of demand by Fortune, government and private sectors.

Premikati with Aon Cornerstone

Premikati, Inc. partnering with Aon Cornerstone

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Premikati, Inc. with Aon Cornerstone

Partnership, A “Win-Win” For Premikati, Inc. Clients Looking to Diversify Their Supply Chain

Indianapolis, IN Nov.2, 2016 – Premikati,Inc. today announced a strategic partnership with Aon Cornerstone, a business unit of Aon plc (NYSE:AON) that focuses on fostering strategic alliances with minority business enterprises. (MBE), headquartered in Indianapolis, is a WEBNC certified woman- owned firm with extensive experience in the risk mitigation industry. Aon plc is the leading global provider of risk management, risk and reinsurance brokerage, and human resource consulting and outsourcing solutions.

Aon Cornerstone unites the global risk management and human resource solutions of Aon with the local presence and functional knowledge of (MBE) to deliver distinctive value to clients. By leveraging the specialized expertise, broad resources, global network, intellectual capital and best practices of the two firms, this partnership is positioned to deliver strategic, integrated strategies and solutions for managing risk and human resource demands while meeting important diversity and inclusion imperatives in an increasingly complex global environment.

Through a rigorous vetting process, Premikati, Inc. was chosen by Aon Cornerstone as a new addition into their exclusive network of partners seeking to care for existing clients’ needs surrounding diversity and exploring new endeavors that would afford global corporations, Fortune 100 companies, and large public entity clients the opportunity to work with a minority-owned firm, while simultaneously giving them the comfort of Aon’s extensive global network of resources, support and service.

About Premikati

Premikati is a WBENC certified WBE Management Consulting and BPO firm that is specifically tailored to Contract Management and Procurement. We help our clients with all facets of contracting and procurement strategy as well as outsourced Contract Management Services.   We employ procurement executives, attorneys, contract management professionals, Six Sigma Black Belts, and certified Change Masters with extensive experience either inside or consulting with the world’s top companies.

For more information on Premikati, Inc., log onto https://www.premikati.com

 

For more information on Aon Cornerstone, log onto http://www.aon.com/cornerstone

Premikati Marketplace

What is the Premikati Marketplace?

By Procurement No Comments

The Premikati Marketplace is everything you’ve been dreaming about to streamline your purchase request to order process and better manage the relationship with your suppliers.

Procurement software leader, SAP Ariba™, and Premikati together have designed a solution for the SMB space providing SAP® Ariba Buying as a BPO service – reducing monthly costs and the need for implementation all together.

This is the same software used by Fortune companies around the world, and is supported by Premikati’s team of procurement experts. 

Everything You Need In One Place

Stop wasting resources on inefficient purchases from uncontracted suppliers. Earn back your cash and control by shopping tens of millions of products through our intuitive interface that functions with the same familiarity as personal, online shopping.

Our B2B marketplace offers non-sourced goods all on a single, simple platform. 

Find products for a variety of needs, including: 

  • Office Supplies
  • Electrical & Test Equipment
  • Technology & Accessories,
  • Facilities & Maintenance
  • MRO & Industrial
  • Other Goods

Want to Add Your Own Suppliers?

We can do that for you!

You have the option to use both the Premikati Marketplace catalog as well as your own contracted catalogs with your favorite suppliers.

The Premikati team will work with your suppliers to get them onboard and transacting!  There are hundreds of suppliers already on the Marketplace offering thousands of goods and services.

Adding your own specific suppliers will add a bit more cost and implementation time.

The Name of The Game Is Savings… And Our Customers Are Winning

The Premikati Marketplace helps your business save in every way. 

Save time by integrating a single platform to meet all your needs into your buying process. Save cash by finding new savings opportunities in our trusted array of affordable, high-quality suppliers.

Save your sanity by gaining visibility and control over your business’s purchasing with features like user access and spend controls, price thresholds, and easy-to-manage reporting.

Plus, you can expect to find price savings on average of 8-10%, and as high as 35% by reducing tail spend, rebate savings of around 1% on typical Premikati purchases, and process savings of days or weeks simply by making the switch.

The Premikati Marketplace utilizes a prime, subscription-based approach that leaves your business richer—in time, money, and data—every step of the way. 

Without All The Technobabble And Wait Times

Opt out of overly-complex purchasing solutions that require you to hire a whole tech team just to keep it running after lengthy implementation periods. Opt in to the Premikati Marketplace for 24-hour turnaround on implementation—start to completely finished.

And, while you don’t need any IT Systems Admin, and there’s no technical implementation to delay your growth, we do offer free help desk support.

Our platform is so easy to use that we won’t mind if you call the help desk just to chat—our help desk folks are getting lonely in all that silence. 

Healthy, Efficient Supply Chain

Vendor management and the supply chain process should work for your business, not against it. Streamline your processes with the Premikati Marketplace to ensure you’re getting the best deals, using your time wisely, and giving your business its best opportunity to grow to its fullest capacity.

Our SAP Ariba backed, compliance-ready, procure-to-pay purchasing platform is the measurable, manageable, and convenient way to find trustworthy suppliers, control ad-hoc spending, and keep your data clear and close at hand. Plus, it starts as little as $500 month. 

Do you want to find out more about the Premikati Marketplace or learn more about how to strengthen your supply chain for free—from our experts to yours? Join any of our e-learning webinars with industry expert, Ryan Matthes, Senior Vice President of Global Procurement at Premikati, Inc. And if you’re ready to dive into the Premikati Marketplace, you can start your subscription here through our sales team. 

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