Procurement likely ranks up there on the list of most under-appreciated corporate functions. While at its basic element, it amounts to “purchasing,” the procurement specialist has to be a creative and shrewd thinker, able to anticipate the needs of their company and negotiate aggressively in the planning of resource provisioning.
Procurement specialists might deal with a range of different kinds of contracts and suppliers. Supply chain scenarios can take the shape of basic provider agreements, performance-based providers, shared services models, and even equity partnerships.
Contracts may take any of these forms and can be used for goods, services, or other resources. The vendor may be another business, a subsidiary company, or even a government department. Procurement specialist skills can be condensed to these key areas:
• Analysis – Knowing business objectives and requirements
• Market research – Assessing the options for meeting the objective need
• Cost analysis – Integral to any buyer-seller relation
• Communication – With both external suppliers and company executives
• Negotiation and contracting – The central function of procurement
• Expedition – Seeing to the shipment, delivery, fulfillment, or otherwise execution of the agreement
• Supplier liaison – The procurement specialist work as an agent between the supplier and the company, managing the ongoing business relationship
Contract Management for Procurement
At all stages of the procurement life-cycle, it is most advantageous to the procurement specialist to have a constant overview and awareness of contracts, both those currently held by the company and potential contracts they could hold in the future. Managing procurement contracts helps in the analysis and review of existing and speculative arrangements.
Automated contract management is becoming the standard for procurement departments the world over because it is so effective at reducing time bottlenecks in contract management decisions. Reviewing fifty contracts at a hundred pages each as a manual undertaking is unthinkable for all but the biggest teams, but with automation, it’s all done in a few seconds. No procurement department should be without it.
Continuing Challenges In Procurement
What lies ahead for contract procurement? Beyond merely arranging and maintaining buyer-seller agreements, a specialist should develop procurement analyst skills within their field. Some key areas to develop include:
Key Performance Indicators (KPI) – This applies to evaluating potential sellers and judging their ability to sustain your expectations. This is not a pressure point for basic providers but becomes more crucial for performance-based providers and other advanced agreements.
Communication and collaboration – Ideally, your department’s process should be as transparent to your company as possible. You need to be able to share and collaborate with departments such as legal, accounting, production, executive, and more. Both internally and externally, your communication skills are crucial and you should seek to be in a position to pull up data at a moment’s notice relevant to any discussion.
Financial skills – This goes without saying for most cases, but there are procurement situations where advanced economics come into play. Knowledge of credit, insurance, banking, real estate, and other financial spheres isn’t out of the question. Even watching the economic news can help in procurement, since it helps to have an eye on the market and especially the market future in making some decisions.
Research skills – There is nearly no possible industry that has not been impacted by our rapidly developing technology. Procurement specialists are better off when they’re better informed, following industry and trade literature in order to stay on top of cost-cutting innovations in the products and services they procure.
The Future of Procurement
The future of procurement is in the cloud and on the computer. The industry is rapidly becoming what we call “e-procurement” because B2B eCommerce is becoming the standard across industries. This can mostly be seen as a benefit, streamlining the process and cutting out some cost. Of course, having automated contract review software in the supply chain pipeline will complement a more networked procurement approach.
This is also going to mean that procurement specialists have to stay on top of their training to keep up with new tech. There also might be a future where the procurement field gets a little more competitive. As electronic mediums continue to streamline the process of commerce, being able to move fast and make informed decisions may become the deciding factor in how much value a procurement specialist can bring to their company.