How does procurement consulting affect predicted ROI in a crisis?
Summary
Procurement has proven to be one of the leading functions of any business, especially when businesses are required to navigate overnight crises.
High returns on investments have also become equally important as organisations struggle to stay afloat.
During the COVID-19 pandemic and the current crisis in Europe, businesses around the world are experiencing the effects of a global economic crisis.
By increasing and maintaining ROI through strategic business continuity, organisations have the ability to use an integrated approach that allows them to seamlessly navigate around supply chain challenges while maintaining their ROI.
Transforming teams into a future-ready operating model is also a tried and tested mechanism where highly trained and skilled teams proactively measure the impacts of any potential crisis and provide the necessary solutions to mitigate the effects.
Adapting to a continuously changing business landscape has never been more important with the recent frequency of crises that are impacting the world. Having the necessary strategies in place to maximise ROI while navigating these challenges must be the key focus of any company looking to build a sustainable business model.
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The primary focus for any organisation in a time of crisis—similar to COVID-19—is to protect cash flows by reducing expenses. As the pandemic broke out, businesses around the world were in a state of panic trying to implement short-term survival strategies by reducing unnecessary expenses.
Typically, one of the primary expenses that are considered dispensable are consulting procurement services, however, with many companies focusing on short-term objectives, long-term goals were often put on hold. As time went on, organisations realised that they cannot simply overcome the challenges they face, but must also develop long-term, sustainable strategies to increase and maintain ROIs.
With supply chains crippled, procurement took on new strategic value to help businesses create a long-term strategy that prepares them for the aftermath and management of any crisis. With the current downturn in the economy and the crisis in Europe, businesses are once again facing innumerable adversities.
While procurement consulting might seem like an additional expense that businesses can opt to leave out of their annual budgets, evidence shows that it can help them stick to their long-term goals and thrive during and after a crisis.
Increasing and maintaining ROI through business continuity
The primary purpose of the procurement function is to ensure that businesses can continue their operations despite the complicated business environment while planning for diverse scenarios.
The key is to ensure that a business has a transparent view of its supplier’s landscape. These relationships can give businesses an edge when anticipating possible supply chain disruptions and identifying alternative solutions to manage their supporting functions.
More often than not an integrated approach can also help businesses optimise their risk management approach and increase ROI. With an approach that prioritises key functions like procurement, finance, and project management, businesses are able to successfully navigate these challenges and work towards a more sustainable business strategy unaffected by potential crises.
Transforming teams to a future-ready operating model through procurement consulting
As companies gradually become accustomed to accepting that a landscape riddled with crises is the new normal, the focus is shifting towards procurement leaders and their teams to re-establish normalcy in businesses.
With many crises in recent years taking place at an unprecedented pace there is little to no time for organisations to adapt their business models. This is why it is imperative that businesses stay vigilant and proactive to any challenges that may appear and impact their ROI.
Procurement consulting can help businesses prepare for these challenges by developing agile teams trained to identify potential threats to supply chains and establish strategies to mitigate the effects. These are often known as task forces.
Once these task forces have identified the issues and the accompanying solutions, they can then be sent to the procurement team for execution.
Adapting to a continuously changing business landscape
With every crisis, supply chains become increasingly more antifragile to the changing environment. At least that is the ideal outcome for any business.
Supply chains are becoming stronger and supplier risk management processes are ensuring that companies have more control and transparency over the procurement and supply functions.
Technology has become a necessity over the past few years with businesses reducing unnecessary travel and face-to-face meetings. Today, it has become an equally important feature for procurement teams to bridge communication gaps with suppliers.
Procurement consulting is an effective asset that helps businesses navigate these changes with their experience guiding businesses throughout these turbulent times and knowledge of the best practices available. It is an asset that can support organisations and provide an objective perspective that can increase their potential for success.
Leverage consulting services to maximise your ROI
As we face the challenges of today the focus cannot be limited to staying afloat. The goal of any organisation is to invest in plans and tools that are flexible and antifragile to build strong internal and external infrastructures capable of withstanding the impact of any crisis.
While these challenges have added an extra layer of complexity into businesses, they are also opportunities that organisations have used to create more sustainable strategies that can stabilise and improve ROIs.
Procurement consulting, therefore, should not be viewed as a liability, but it should be considered an asset that helps businesses reduce costs and risks, and increase cash flow and ROIs.
If the pandemic and the current economic landscape is a prediction of what businesses can expect in the future, then having a strong procurement function to manage supply chains and purchasing effectively and efficiently should be at the forefront of any business strategy.
