This article explores how procurement can drive wider and greater innovation across organisations whilst continuing to deliver on the traditional expectations. Procurement teams have always needed to focus on cost-cutting – this is always an expectation - but the piece argues that the shift towards value creation and innovation is essential for long-term relevance and success.
Key insights include:
- Procurement’s unique position: procurement teams interact not only with internal stakeholders across the full breadth of the organisation, but also with external suppliers, giving it a holistic view of areas ripe for innovation.
- Changing the conversation: to unlock innovation, especially in the era of AI, procurement teams must engage and support stakeholders with a understanding of innovation in the wider world, embracing challenges and pain points.
- Beyond AI: while artificial intelligence offers many benefits, innovation also comes from process improvements, new commercial mechanisms, supplier collaboration and much more.
- Case study: a major rail franchise improved service and reduced costs by restructuring taxi service contracts and demonstrating procurement-led innovation in action – read the full article to understand how!
- Embedding innovation: successful transformation requires many changes, both in procurement processes and wider business impacts and perceptions. Technology can help free up capacity and support innovation-centric activities
- Practical steps: create the foundations for success by investing in your peoples’ skills, considering your partners for journeys that you might not quite understand yet, finding the problem that you’re interested in experimenting with, and communicating clearly across your organisation, setting out the ‘why’ and the ‘what for’.
Evolution is the new constant but the traditional expectations remain! Procurement is a cost-focused function that must lean on innovation to meet the expectations set upon it.
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