A Fresh Take: Why Transparency is Not Just a Buzzword
Consumers want to choose companies with a diverse and ethical supply chain base. So how can procurement ensure this is prioritised? Senior Solutions Consultant at Basware, Lindsay Munn, explains:
Looking behind the curtain…
The team at Procurious has been asking the million-dollar question: how does a business become more transparent? In a recent blog for Procurious, Basware’s very own Director of Product and Business Management Jason Vincelette shared the following about this proliferating issue:
“Consumers worldwide are demanding transparency from the businesses they buy from. Environmental sustainability, ethical sourcing, humane work conditions – buyers want to ensure these three factors are being upheld. “
Jason pointed out that it hasn’t always been this way…
“Historically (and unfortunately) businesses haven’t always taken such a see-through approach to their practices. A ‘get it done, regardless of the cost’ mentality was a common drive for organisations trying to meet production demands, create their goods as cheaply as possible, all the while being unable to get sustainable strategies off the sidelines.
So, what’s happening now?
“Times are continuing to change and organisations are stepping up by reviewing CSR and corporate policies to take responsibility for their actions. Due to a rise in social media and digital platforms, a new, immediate, pressure is being placed on companies who are not taking part in the sustainable movement. They are now making a promise to not only do no harm but also benefit the environment and workforce overall. Consumers are getting smarter, more enlightened, and more willing to change their consumption practices in order to do what’s sustainable and ethical.”
Jason’s right, and it’s not just his expertise that proves this – it’s in the research! Take a look at his article here to see what the stats say.
Food for thought… what needs to be visible?
The steady growth in these types of initiatives has got us all thinking about how do you balance what consumers really want to see and what procurement needs to know to maintain ethical and responsible business practices? What needs to be front and centre of the visibility project?
It’s a question that urgently needs answering, which is why Basware and Procurious have teamed up to produce a most enlightening webcast: Let’s Get Visible: Diverse, Local, Sustainable Procurement. On September 1, our all-star panel will be discussing the issues facing global businesses today when it comes to visibility, data, and effective decision making through transparency. This is a web event not to be missed!
But before you join us on September 1, you need to read this: we’ve put a spotlight on some of the areas that will be discussed at length in the webinar, and one that you really need to know about, and be on top of, when establishing transparency in your business: the importance of data and how technology supports strong supply chains, sustainable procurement, and supplier diversity.
Supplier diversity programs are becoming a regular part of supply chain management. What’s more, it’s one of the top initiatives that consumers are looking for before buying into potential companies. Strong data is paramount to driving visible, sustainable procurement practices. So let’s take a step back, and look at what we’re really talking about here.
The importance of data in driving sustainable procurement and supplier visibility
Procurement and/or sourcing functions have become more and more an inherent part of the business strategy, as all these changes have shown how important it is to proactively manage your supply chain, suppliers, spend, and transactional data. If your usual supplier is shut down or experiencing major delays – how are you alerted of their closure, and how do you quickly find a suitable alternative? This type of visibility can be achieved by integrating systems, digitising your operations (if not already), and capturing the right data from your suppliers.
When visibility is fully achieved, organisations can proudly own their data and use it to make strategic decisions. Need a new supplier for plastic? No problem. If you have visibility of your supplier base you can diversify and add alternate options as back up. You can also use the data to understand who your top suppliers are, how much you spend with each, and decipher if you’re happy with the current contract terms. The use of this data empowers you to build better and stronger relationships with both new and key suppliers.
Another aspect is that 100% spend visibility is the start of a journey to get all spend under management – even at a granular level. Leverage this information to reduce maverick spend and fully understand long tail costs. Although these costs typically represent around 20% of all business spend, even a 3% cost savings could dramatically impact the bottom-line for large organisations. Those incremental gains – powered only by your data – will enable you to begin focusing on your procurement strategies and answer questions, such as, “are these the types of suppliers that we want to work with?”.
Embrace transformation to drive change
Now more than ever, it’s time to use this momentum to embrace procurement disruption and digitise processes. The importance of procurement and its focus on being both “customer-centric” and “supplier-centric” continues to rise, making the selection and partnership of the right suppliers crucial in times of economic or political change.
The most successful organisations will embrace a growth mindset, learn from the past and adapt procurement and sourcing strategies to meet a resilient business model. As the role of procurement continues to shift towards strategic value, the need for renewed focus and skills to analyse your data cannot be ignored.
Hear more about supplier diversity and the Visible Commerce Initiative in our enlightening webinar Let’s Get Visible: Diverse, Local, Sustainable Procurement, streaming on 1 September. Register to secure your place today!
