Moving to a Procurement Partnering Model: Benefits and Challenges

In today’s competitive environment, effective procurement practices are crucial for achieving operational goals, maximising cost efficiencies and maintaining probity. For many organisations, the value of embedding a procurement advisor directly into the business goes beyond just cost-saving and it is targeted to ensure alignment with strategic objectives, compliance with policy and regulatory frameworks, and continuous improvement in their procurement process. However, like any strategic decision, embedding a procurement advisor comes with both benefits and potential challenges.

The Benefits of Embedding a Procurement Advisor

1. Process Alignment and Improvement

One of the key benefits of embedding a procurement advisor is having a central point of contact who not only understands the requirements of the process but also knows the challenges users face when navigating procurement.

A procurement advisor who is fully immersed in the organisation has a broader understanding of how stakeholders interact with the process, helping to fine-tune the processes and ensure they support both the organisation’s and the specific team’s goals. They view the process through a wider lens, enabling them to identify bottlenecks, remove inefficiencies, and work towards continuously improving procurement workflows. This proactive approach leads to shorter procurement cycles, increased compliance, and a reduced risk of disruptions.

2. Streamlined Templates and Procedures

When a procurement advisor is a solid part of the team, they can create and maintain standardised procurement templates and procedures, ensuring consistency across the end-to-end procurement cycle. These templates can be designed to reflect not only compliance with legislative requirements but also industry best practices, reducing errors and ambiguities. A well-designed set of templates can drastically reduce unnecessary administrative steps and improve the accuracy of information flowing among stakeholders, leading to more efficient tendering processes and supplier management.

The procurement advisor can also ensure that internal processes and policies are updated in a timely manner to reflect any changes in legislation or board directions. By maintaining a direct line of communication with the leadership team, procurement advisors can cascade information down and directly update and implement procedures, ensuring compliance and alignment with legislation and the industry standards.

3.  Improved Compliance and Probity

Compliance is critical in procurement, especially in industries with strong regulations such as government or finance. A procurement advisor embedded within the business acts as the ‘Guardian of Probity’, ensuring that all procurement activities are conducted transparently, ethically, and in accordance with legislative requirements. By having a dedicated advisor overseeing the process, organisations can minimise the risks of conflicts of interest, fraud, and misuse of funds.

Additionally, a procurement advisor can handle audit preparations, ensuring that all records are accurate and accessible, which simplifies internal and external audits protecting the organisation of any legal ramifications.

4. Single Point of Contact for Internal Stakeholders

Having an in-house procurement advisor allows for a streamlined communication model across the business. As the central point of contact for all procurement-related inquiries, the procurement advisor can quickly respond to queries, provide guidance, and facilitate communication between various internal stakeholders, SMEs, and suppliers. This prevents misalignment, conflicting advice and miscommunication that can occur when procurement is handled by multiple individuals within a team.

5. Tailored Supplier Relationship Management

Supplier relationships are a critical aspect of procurement that is often overlooked. By embedding a procurement advisor, organisations can establish more strategic and personalised relationships with key suppliers in alignment with the category plan (where one exists). A procurement advisor can support procurement negotiations, provide strategic input on supplier performance, and manage potential risks throughout the end-to-end process. Additionally, they can assist with supplier audits and work closely with suppliers to foster long-term partnerships going beyond just pricing.

6. Centralised Training and Development

An in-house procurement advisor can take responsibility for training teams and upskilling their capability in procurement processes and best practices. They can develop and deliver ongoing tailored training programs to ensure that everyone directly or indirectly involved in procurement develops the necessary skills and knowledge. Regular training also helps to foster a culture of procurement excellence, ensuring that every team member understands their role and duties in the procurement process and adheres to the same standards.

7. Real-Time Market and Policy Updates

A procurement advisor is ideally placed to provide the business with real-time updates on market conditions, supplier trends, and regulatory changes. This is particularly important in industries where policies or market conditions can fluctuate rapidly, requiring procurement teams to be agile and responsive. By staying informed about industry trends and changes in policy and, collaborating with Category Managers, advisors can adjust procurement strategies to ensure the organisation remains competitive anticipating potential risks before these become issues.

Potential Challenges to Consider

Embedding a procurement advisor offers significant benefits. Organisations should be aware of a few challenges they need to address and find ways to mitigate. These are:

1. Initial Cost and Resource Commitment

Embedding a procurement advisor requires an initial investment in terms of cost, effort and resources. The benefits become tangible over time. Smaller businesses, in particular, may find the upfront cost challenging, especially if they do not have a large volume of procurement activities. However, the financial cost should be considered an investment that yields long-term returns through enhanced efficiencies, risk mitigation, and cost savings.

2. Cultural Integration

The success of a procurement advisor is directly linked to how well they integrate into the company culture. If the advisor is perceived as an outsider or if there is resistance from other areas in the organisation, the advisor's ability to drive change and improvement may be limited. Therefore, it is important to ensure that the advisor is well-aligned with the values and objectives of the organisation as they work collaboratively with their internal and external stakeholders.

3. Overdependence

There is a risk that embedding a procurement advisor could lead to overdependence on a single individual for all procurement-related activities. If the procurement advisor leaves or is unavailable, it could lead to disruptions or delays in the process. To mitigate these risks, it is essential to ensure knowledge transfer, clarity in processes and a procurement team that can sustain operations even in the procurement advisor’s absence.

Conclusion

Embedding a procurement advisor within your business offers numerous benefits, from improving process alignment to ensuring compliance and optimising supplier relationships. However, to make the most of this role, organisations need to view it as an investment in the overall strategy. While there may be challenges in terms of cost, time and integration, the long-term advantages far outweigh these initial hurdles, leading to more efficient procurement practices towards a greater organisational success.