Is Procurement still seen as a back office function?

In this episode of The Procurement Software Podcast, host James Meads tackles why procurement is often seen as a back-office function and offers insights on transforming it into a strategic powerhouse.

Outdated perceptions, poor data quality, inadequate technology, and a lack of executive mandate keep procurement from reaching its full potential as a value-driving function.

Tune in for actionable steps on elevating procurement to a strategic role!

Is procurement still a back office function?

James explores how aligning procurement with broader business objectives is essential for moving it beyond tactical tasks.

When procurement operates in isolation, it risks being perceived as purely administrative, rather than as a critical contributor to the organisation’s success. To shift this perception, integration with overarching goals is crucial, enabling procurement to directly support strategic initiatives and deliver measurable impact.

A key takeaway is the importance of accurate, reliable data in empowering procurement teams to make informed, fact-based decisions. With high-quality data, procurement can hold meaningful, value-driven discussions with stakeholders, advocating for its role as a strategic partner within the organisation. Strong data not only facilitates better decision-making but also helps procurement showcase its contributions more effectively.

James also highlights the transformative role of modern technology. Many procurement teams still rely on archaic ERP systems that handle only tactical procurement tasks, leaving limited scope for strategic engagement.

By adopting fit-for-purpose tools, teams can automate repetitive, low-value tasks, creating valuable time for high-impact initiatives like supplier relationship management and category strategy.

Finally, James underscores the importance of a clear mandate from leadership. With executive support, procurement can proactively align its objectives with the organisation’s, evolving from an operational function to a strategic partner that drives long-term value and growth.

Timestamps:

[00:00:38] - Moving Procurement from Back Office to Strategic

[00:01:31] - Why Procurement is Labelled as a Back Office Function

[00:03:29] - Factors Contributing to Procurement's Back Office Label

[00:05:17] - Importance of Well-Run Procurement Organisations

[00:05:38] - Role of Procurement Technology

[00:07:04] - Trends in Procurement Technology Adoption

[00:08:38] - Achieving ROI on Procurement Tech

[00:09:48] - Importance of Good Spend Data and Contract Visibility

[00:10:54] - Tools and Resources for Procurement Tech

[00:11:05] - The People Aspect in Procurement Transformation

[00:12:39] - Centralisation in Procurement Teams

[00:13:53] - Conclusion and Final Thoughts

And that wraps up another episode of The Procurement Software Podcast!

Thanks again for listening, and do please leave us a review on Apple Podcasts or rate us on Spotify. Every one helps!

We'll be back at the same time next week, so see you there.

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