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Procurement is changing. We’re seeing teams of all kinds leveraging new technologies and discovering ways of working to transform how they operate. The end goal: to move from the perceived enforcers of the business to true enablers of the business.
It’s a journey, and many teams are only just beginning. This is exemplified in Deloitte’s latest CPO survey, which finds that few believe that procurement is an excellent strategic business partner. And while perceptions are low, the opportunity to unlock value in procurement is great.
To find out more about the challenges and opportunities facing procurement teams, we spoke with Daniel Ball, Chief Marketing Officer at Wax Digital. He provides the inside track on how teams are developing, and how technology partnerships, like the one between Wax Digital and Tradeshift, are paving a new way forward for procurement.
What are the major challenges facing procurement organizations right now?
Procurement teams are under pressure to do more with less. This isn’t a new challenge, but it’s certainly intensifying. As we all know, the primary focus in recent years has been cost reduction: how much money can procurement save for the organization. That responsibility still exists, but it’s joined by other demands like risk management and contract enablement. So that’s putting lots of pressure on teams, many of whom were already struggling to keep their heads above water.
The role of procurement is also changing. We’re seeing teams striving to become more strategic and shifting from business enforcers to business enablers. This is where the real transformational activity is happening. But it’s not straightforward. It requires procurement to deeply integrate itself into business operations. It’s a resource-intensive job that requires lots of people and optimal technology. And many teams have neither of these right now.
What are the consequences if procurement teams can’t find a solution to overcome these challenges?
It’s simple: procurement will remain a transactional back-office function. And that’s a huge missed opportunity, both for procurement and for the enterprise. That’s because focused and meaningful investment in procurement delivers an unmatched ROI for the enterprise.
We’ve seen it firsthand with a number of our clients. When they get the tools in place to become a business enabler they can make all the internal stakeholders they work with more effective. That means they can focus on their core business and deliver more value through their work. And all that leads to meaningful bottom-line growth.
How does Wax Digital help solve these challenges, and what opportunities does this create for procurement teams?
It’s all about efficiency. The promise of our solutions isn’t about enabling procurement teams to do fundamentally new things. It’s about enabling them to carry out core processes efficiently. If they can’t do that they’ll struggle to move away from transactional to strategic.
Our solutions make life easier for the rest of the organization as well. That’s because they allow procurement teams to build flexible purchasing frameworks for their internal buyers. This means those buyers can source the goods they need without relying on procurement — which often creates bottlenecks.
And procurement can be safe in the knowledge these teams are purchasing within the correct frameworks and that all the controls and audit processes they require are in place. And that gives them the freedom to focus on more strategic tasks.
Why have you partnered with Tradeshift?
We first engaged with Tradeshift because of client demand. It was a pretty pragmatic beginning to the relationship. We had a customer that was using our source-to-contract system who wanted to integrate Tradeshift’s e-invoicing solution. So we joined forces to integrate that solution for the customer.
And that created the spark. It’s hard to ignore such a strong validation from a customer that clearly sees the merits of combining Wax Digital software and the Tradeshift platform. So we looked into it more and quickly discovered there are lots of synergies and shared value we could create together. And that led us to develop our sourcing and contract management apps to fully integrate into the Tradeshift ecosystem.
What one word of advice would you give to a company going into 2020 and looking to uplevel its procurement organization?
Act. Doing nothing is a big risk and the quickest way to move backwards. So my advice is to do something, even if it’s small, and make change part of the culture of your procurement team.
Take the lead
Despite all the challenges faced by procurement teams right now, the opportunities in front of them are immense. Teams that take the initiative and make digital transformation a priority can shift from business enforcers to business enablers. And, by doing so, they can unlock genuinely meaningful value for the enterprise.
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