Collaborative Procurement: Taking the Lead on Risk Management
From regulatory changes and supply chain resilience to sustainability requirements and cost containment, procurement risks seem to multiply daily. Teams are under pressure to mitigate these risks and take a proactive, leading role within their organisations to manage them effectively.
Yet, according to a study by Economist Impact and SAP, only 41% of respondents are highly confident in their ability to control vulnerabilities – a decline from 62% last year.
Tackling the vast number of risks can’t be done alone. Collaboration with internal and external partners is not only essential for success. It’s also a critical enabler for procurement teams to build resilience and stay a step ahead of potential challenges. Unfortunately, collaboration with stakeholders is lagging.
Here, we’ll explore how procurement professionals can leverage cross-departmental and supplier collaboration to take the lead on risk management.
Building Resilient Supplier Relationships for ESG Success
Given its rise on corporate agendas, one of procurement’s biggest risks relates to ESG. Today, sustainability requirements are more than a nice-to-have—they’re essential for reputation management and legal compliance. According to Accenture, 34% of major global companies have set net-zero targets, but 93% risk failing without significant effort.
Supplier collaboration and engagement are essential to meeting ESG commitments and minimising risk. However, many companies struggle to understand their suppliers’ carbon footprints, which is critical to achieving net-zero goals.
Engaging suppliers directly, setting clear expectations, and monitoring progress are keys to reducing emissions and minimising ESG risks. Tools like SAP Business Network can help you connect with sustainable suppliers that align with your ESG goals without compromising on timely delivery in times of disruption. By setting expectations through supplier codes of conduct, conducting regular audits, and enabling easy communication, procurement teams can collaborate with suppliers to align with their ESG objectives.
Navigating Complex Regulatory Requirements Together
From new e-invoicing laws to supply chain transparency regulations, compliance is a moving target, and keeping up with changing regulations can be a full-time job. Through close collaboration with risk and compliance teams, procurement can stay one step ahead of regulatory risks and ensure compliance.
New mandates like Germany’s Supply Chain Due Diligence Act, for example, require large companies to implement a supplier risk management system to monitor human rights and environmental risks in their supply chain. Procurement teams can prepare for such changes by leveraging digital tools like SAP’s Business Network, which facilitate real-time tracking of supplier compliance.
Proactive monitoring and regular check-ins with your risk and compliance teams can make a world of difference in anticipating and preparing for regulatory changes, ultimately reducing risk and strengthening resilience.
Cybersecurity: Procurement’s New Worst Enemy
Cyber security is a foremost concern in the procurement world. In fact, Gartner predicts that 45% of organisations will face attacks on their software supply chains by 2025. Cyberattacks targeting suppliers can disrupt procurement processes, expose sensitive information, have a significant impact on business operations, and damage relationships.
To manage these risks, procurement professionals need to collaborate closely with IT and security teams, setting protocols for vetting suppliers’ cybersecurity practices, and creating incident response plans for potential cyber breaches. Collaborative efforts in cybersecurity can ensure that everyone—from procurement to IT to suppliers—is on the same page when it comes to data protection, reducing the likelihood and impact of cyber incidents.
Your Tool for Leading Risk Management
Collaboration is more than just a buzzword; it’s a strategic tool that can empower procurement to lead in risk management. As procurement professionals work with compliance, risk, IT, and supplier partners, they create a resilient, agile approach to navigating today’s challenges—from ESG compliance to cybersecurity threats. By building stronger connections across departments and with suppliers, procurement teams can transform risk management from a reactive task to a proactive strategy, truly leading the charge.
Presented in partnership with SAP, Procurious is hosting the ‘Collaborative Procurement – How to Take the Lead in Managing Risk’ webcast on 21st November at 10am EST. Join Procurious founder Tania Seary as she explores how you can leverage collaboration to take the lead in managing risk within your organisation with Richard Downs, VP, Head of Business Network Product Marketing at SAP, and Sydney Stewart, Lead Americas Analyst at Sibylline Ltd.
Register for the webinar now by clicking the link below.
