Improving the value procurement delivers can generate €7.6m in revenue, reports Xoomworks

A well-managed supplier relationship management programme can save top performing businesses €22.8m in spending and generate €7.6m in revenue per €1bn of annual spend, according to research by The Hackett Group.

Organisations need to recognise that most procurement functions can deliver more value to their business. Procurement can be a valuable corporate asset – delivering savings, reducing risks, and creating better value for money.

The most successful procurement functions recognise the need to get the mechanics of procurement right, and then invest in their behaviours, enabling them to engage with the business and their suppliers as partners.

Established procurement specialist Xoomworks claim to have built an innovative framework called Complete Procurement which helps high turnover organisations in finance, insurance and retail make significant savings through improving returns on current investments in people and technology.

The process not only addresses how the organisation acquires goods, services or works from an outside external source, but also uses specialist coaching and consulting to deliver a greater, more sustainable range of benefits.

Ian Dagg, practice lead at Xoomworks, said: “Organisations need to recognise that the procurement function can provide the business with much more than simply getting the lowest cost for purchased materials and services. Technical control is essential in any project, but getting people collaborating in a controlled environment is a bigger challenge.”

Improved procurement processes can transform organisations, Xoomworks claims. Implementing better mechanics such as technology, process, policies and changing organisational structure is only an initial step in creating a platform for change. The real transformation builds on this solid foundation and focuses on the way people behave and interact with the mechanics. These behaviours are outward facing elements of procurement relating to brand, direction, employee management, stakeholder engagement and  performance improvement.

The balance between solid mechanics and positive behaviours allow organisations to break through the frustrations often experienced when only the mechanics are in focus, thereby allowing the procurement function to acquire new levels of added value for their organisations.