Building a Strong Procurement Team: Tips and Strategies

A strong team is the key pillar of your business’s success. 

Procurement is a complex process with many aspects that should be efficiently taken care of. For a smooth process, you need a strong and productive team. However, hiring qualified employers is just half of the job. 

In this article, we will explore a variety of tips and strategies on how you can build a strong procurement team. So, if you are ready, let’s dive into it. 

What is Procurement? 

First, let’s briefly understand what is procurement. Procurement is a process organizations use to acquire necessary goods and services. 

The main aspects of the procurement process include strategic sourcing, contract management, supplier relationship management, and planning (based on data insights). 

Importance of a Strong Team for Successful Procurement 

Each team member will be responsible for different parts of the procurement process. Thus, you must first create a strong and united team to ensure a smooth process. 

Procurement Teams Roles & Responsibilities 

Before moving on to the tips and strategies for building a solid team, let’s take a closer look at the structure of procurement teams. 

Procurement teams are responsible for handling different aspects of procurement. Thus, depending on the size of your organization, you can have sub-divisions within the team or just single team members responsible for each aspect. Let’s examine what each sub-division or person is responsible for. 

Purchasing Team 

The purchasing team handles the purchasing process, from placing a purchase order to ensuring smooth and timely deliveries. This team is also responsible for managing the purchasing process and ensuring it is efficient to avoid unauthorized spending, double payments, or overcharges. 

Strategic Sourcing Team 

The next team is the strategic sourcing team. This team’s main responsibilities include negotiating better prices and sourcing suppliers for further collaboration. 

Other duties of the strategic sourcing team include running RFIs and RFPs with vendors to generate a sufficient amount of acceptable proposals to make decisions that will benefit the organization in the long run. 

For instance, analyzing the price-to-quality ratio is vital, as the lowest price is not the only thing that will benefit the business in the long run. The sourcing team takes into consideration all the nuances when sourcing a supplier. 

Contract Management Team 

The contract management team is primarily responsible for ensuring supplier compliance with the negotiated contract terms and conditions. This team develops various contract templates for different products, defines standard clauses, reviews vendor contracts, and continuously tracks compliance.  

Data Analytics Team 

Finally, we have the data analytics and reporting team. Essentially, team members are responsible for evaluating data and reporting it to managers for strategic decision-making. The main responsibilities include generating and publishing spend visibility reports, conducting regular spend analysis, and identifying spending trends as well as areas of improvement.

Tips and Strategies for Building a Strong Procurement Team 

When it comes to procurement teams, you cannot just hire good employees and expect great results. It requires more effort than that. Strong teams share united goals and values and are collaborative, leading to higher efficiency and better performance. 

So, let’s take a look at tips and strategies you can implement in order to build a solid and strong procurement team. 

Hire Your Dream Employees 

Hiring is a tiresome process not only for the applicants but also for the employers. With each employee, you must assess not only their skillset and potential contribution but also associated costs and risks. 

Well, The foundation of a strong team is having skilled employees. So, let’s understand what skills your procurement team members must have. The first skill is negotiation. Your team members are going to interact directly with the suppliers. Thus, to guarantee good deals for your business, ensure the employees you hire are good at negotiations. 

Another important skill to look out for is strategic sourcing skills. This includes being able to understand how the sourcing process works, know how to conduct market research and understand business needs. 

Also, when hiring procurement team employees, ensure they have the financial aptitude. Procurement teams closely collaborate with the finance department to reduce costs and increase savings. Thus, the team members must be aware of the basic fundamentals of business finances. 

Ensure that potential employees also have excellent communication and collaboration skills. These are essential to guarantee that your team will be united and strong enough to achieve business objectives. 

Finally, do not forget to check whether or not your employees have strong analytical skills. In the procurement process, they are going to deal with lots of data and reports. So, ensuring that employees within your team can interpret and evaluate the data efficiently is essential.

Structure the Procurement Team 

After hiring the employees, first and foremost, you must structure your procurement team. 

Depending on the size of your organization, you should effectively structure your procurement team. For smaller teams, assigning different roles and responsibilities to members is enough. However, for the larger teams, you may need sub-teams, each of which will be responsible for handling different procurement processes such as purchasing, sourcing, contract management, and data analytics. 

You can follow the structure of the team presented earlier in this article. 

Set Objectives and Goals 

For the team to stay motivated and efficient, they must work together toward a shared business objective. If your employees are unaware of the specific business objectives, they will lack motivation and responsibility. However, when you have clearly defined objectives and goals, it will keep everyone on track. 

You can set a larger-scale objective for the whole procurement team. These large objectives are usually set for one year. Then, you can also incorporate smaller goals for each sub-division within the team that will contribute to reaching the final objective. 

For example, the team responsible for sourcing should find five top-performing suppliers within three months for long-term collaboration. The team responsible for analysis should create an efficient action plan for reducing spending by 5% in 3 months, and so on. 

Each objective and goal will highly depend on your business needs, so when identifying these, focus on your niche, current state, and what your business actually requires for growth. 

Set KPIs for the Team Members 

It is vital to have shared objectives, but the motivation will only last for a while if employees have individual goals. So, in collaboration with the employees, management and HR teams create and set KPIs for each team member. 

For instance, in a sales team, the target KPI is often the X amount of sales made in a specifically defined period. In procurement, it can be harder to set individual KPIs regarding cost savings. However, you can set KPIs by “reducing time spent on X type of task” or “improving the speed of Y aspect,” and so on. 

Incorporate the Right Technology 

One more strategy that will enhance your team’s productivity is incorporating the right procurement technology. High-quality procurement software will allow you to optimize procurement processes and reach maximum efficiency. 

To find the right tool for your team, make sure the software offers features such as automation, workflows, user roles and permissions, and a variety of tools for supplier relationship management. Let’s understand how each of these can help your team.  

Automation

Automation features allow your team members to automate a variety of administrative tasks to save time and resources. It contributes to higher employee motivation and allows the team members to focus on more strategic procurement activities. 

Approval Workflows 

When choosing software, make sure that it offers approval workflows to optimize different processes such as contract, invoice, and PO management. It will improve efficiency and increase accuracy. 

User Roles and Permissions for Multi-level Management 

Built-in functionality for assigning user roles and permissions will improve your procurement team’s productivity. When each team knows what they are responsible for, the processes become smoother and easier to handle. 

Supplier Relationship Management Tools 

Last but not least, when picking software, ensure that it offers features for supplier relationship management. Vendor management is critical for the success of your procurement processes. So, to help your team better navigate and manage vendor relationships, choose software that offers functionality such as sourcing tools, supplier performance tracking, real-time collaboration capabilities, and so on. 

Build a Strong Procurement Team with Tradogram 

If you are wondering what high-tech solution can help your team improve its efficiency, then you are in the right place. 

Tradogram comes in handy with all the necessary tools for successful procurement management. The features of the platform range from automation and multi-level management to vendor management and spend tracking. 

‍Contact us to learn how Tradogram can help your procurement team become more efficient and bring higher ROI.