Procurement’s Evolving Role: Tracking Value Beyond Cost Savings

Today, customers, investors, and other stakeholders want to do business with companies that care about the greater good and not just greater profit. They’re interested in companies that focus on ethical and sustainable business practices, not just on the bottom line.

In fact, 72% of survey respondents said they are actively buying more environmentally friendly products than they did five years ago. 81 percent said they expect to buy even more over the next five years.¹

And for good reason. Factors like environmental, social, and corporate governance (ESG), as well as diversity and risk management provide value beyond simply saving money. According to one report, solid ESG practices resulted in better operational performance in 88% of companies.²

While cost savings are still a priority, more business leaders are beginning to expect procurement teams to track value objectives outside of the price tag. Yet these targets can be challenging to track and resolve. 

For one thing, many companies still use spreadsheets and other homegrown solutions that leave room for discrepancies and errors. And it’s common to see multiple tracking tools in the same organization—sometimes even within the same department. 

That’s why it’s critical for procurement teams to have a reliable system for tracking supplier performance across these new categories—ESG, diversity, and risk.

Save time and reduce error with automation

Relying on manual processes to match buyers with suppliers is an inefficient method of the past. A technology platform that automates time-consuming tasks reduces the possibility of human error—like mistyping a word or skipping a row—and ensures more accurate data, saving you time. Consider a centralized procurement tool that automates supplier vetting and simplifies your data collection and supplier management.

“Why is automation an asset only available to the mega giant, rich companies? It should be available to everybody,” said Conrad Smith, CEO of Graphite. “I believe it’s from the lack of a connected network that gives us a trusted place to do—at an affordable level—the kind of automation that these big companies have been doing for years now. That’s what is most exciting. We’re within a decade or so of some really cool breakthroughs in automation, in procurement, and in B2B generally.”

Identify supplier who match your criteria

Find partners who match your specific criteria with a technology platform that applies your custom logic to evaluate and automatically score suppliers based on their responses. Consider an application that integrates with third-party services to further assess supplier information and provide any additional insight that you may want.

References:
¹ Andrew Martins. “Most Consumers Want Sustainable Products and Packaging.” Business News Daily. February 1, 2022. https://www.businessnewsdaily.com/15087-consumers-want-sustainable-products.html

² John Hancock Investment Management. “Why strong ESG practices can offer companies a competitive advantage.” July 8, 2016. https://www.jhinvestments.com/viewpoints/esg/strong-esg-practices-offer-advantages