The Obvious and Simple Solution to Procurement’s Challenge: Productivity is Key

Sometimes, the answer to a difficult question is so obvious that it’s hard to see. It’s simple, straightforward, and right in front of us.

Today, I realized something crucial for procurement. Procurement resources are often fixed. Budgets and headcounts don’t expand, and additional staff are rarely available. The workload remains constant, yet companies continuously expect more: more savings, more efficiency, and more value creation. How can procurement deliver greater business benefits without additional resources? The answer is simple: by freeing up time for value-adding activities.

Productivity Growth = Greater Business Value

Procurement work can be divided into operational and strategic activities. Both are necessary, but only strategic procurement creates new value and competitive advantage. If resources cannot be increased, the only way to generate more business benefits is to optimize time usage. The less time spent on routine tasks, the more time is available for business development.

We tested this hypothesis with our clients. Projects focused on improving procurement productivity led to significant improvements. For example:

• Personal productivity: Task duration was reduced from five hours to one hour, and eventually to just 10 minutes (Case study).

• Process and team efficiency: Process errors were cut in half, and efficiency improved dramatically (Case study).

• Stakeholder collaboration enhancement: Real-time information improved supplier and internal customer satisfaction while reducing waste (Case study).

Through these projects, we realized that speed is a crucial factor. Productivity improvements should be implemented quickly because value has a time component— the sooner efficiency increases, the faster business benefits materialize.

How Can Procurement Optimize Operational Work?

Productivity improvements can be divided into three levels:

1. Personal Productivity

   • Automate repetitive tasks.

   • Utilize analytics to accelerate data consolidation and reporting.

   • Use standardized templates and tools for contracts and RFPs.

     
     

2. Process and Team Efficiency

   • Eliminate unnecessary steps in procurement processes.

   • Enhance collaboration within the team and with stakeholders.

   • Leverage digital solutions to streamline order and contract management.

     
     

3. Optimizing Stakeholder Collaboration

   • Ensure the right information is available at the right time.

   • Standardize workflows and roles with stakeholders.

   • Use data to improve knowledge management and decision-making.

This is Not Just Theory – The Solutions Already Exist

This is not just a theoretical concept—it’s reality. We have implemented this approach in multiple organizations and seen it work in practice. The tools, references, and expertise are available, and the solutions can be deployed quickly and cost-effectively.

Obvious and Simple Solution - Who Can Benefit from This?

Almost all procurement teams and organizations can improve their operations and increase business value through productivity enhancements. Those who benefit the most include:

• Organizations that procure products and services: Healthcare, welfare districts, joint procurement units, industry, etc.

• Procurement teams that manually consolidate data: More efficient use of Excel and other tools frees up time for analysis and decision-making.

• Procurement teams seeking to demonstrate their business value: Improving productivity strengthens procurement’s strategic role.

• Organizations that believe productivity enables added value and competitive advantage: Saving time allows for more focus on development initiatives.

(Sorry, video is in Finnish)

This is Not for Everyone – But Could Your Organization Benefit?

This is not for everyone, but if you suspect that your organization could benefit from this, get in touch.

Conclusion: An Obvious but Powerful Solution

Procurement’s business impact grows when operational work is streamlined, and time is freed up for strategic activities. This can be achieved by improving personal productivity, optimizing processes and teams, and enhancing stakeholder collaboration.

While the solution is simple and obvious, implementing it requires a systematic approach and commitment. When procurement operates more efficiently, everyone benefits: the company, stakeholders, and suppliers.

How could you optimize procurement work and free up time for value-creating activities?

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