Nothing Anywhere All At Once
Think if you don’t have a budget in Procurement then you won’t be able to do anything? Think again!
It’s hard to believe that Quarter 1 of 2023 is already disappearing in our rear view mirrors and we’re all running at full speed towards the middle of the year. And for many the end of Q1 kicks off a new year for financial reporting and, most importantly, budgets. Though most budgets have been completed and agreed towards the end of 2022, this might be the first time Procurement gets a proper look at it.
For many, new budgets will not be a positive thing. Globally, organisations continue to tighten their belts and look for ways to save money after a rough few years. Though Procurement continues to look for alternative parts and sources of supply to combat high levels of inflation and on-going supply chain disruptions, organisations will still have budgets at the forefront of their strategies.
So what happens if you end up with a Procurement budget that doesn’t meet your expectations? It’s certainly not the end of the world, as creative Procurement professionals know how to extract every last ounce of value from any situation. And even without any budget at all, there is still plenty that can be accomplished.
Here are some ideas for activities in key areas that won’t cost you a penny.
Training
In a situation where a budget is reduced, or lost completely, training is frequently the first thing to go. But with an increasingly transient global workforce that is willing to move for the right opportunity, no training could mean a steady stream of top talent heading away from your team.
For Procurement, this means making the most of what is available to it. There are multiple online platforms with free training or development resources. Procurious is one, and CIPS and ISM have resources that are freely available, not just for members.
And if online training isn’t what you need, how about inter-departmental learning? How much more can Procurement professionals get from their roles if they understand how and where the goods and services they source are used? And there’s also the exponential impact of other departments learning how Procurement operates, removing the mysteries and creating stronger relationships.
Processes and Policies
You might not have money, but you still have time and resources available to review internal processes. It’s not the prettiest job, and it really does take time and effort to make meaningful changes, but it may be some of the most important work you do this year.
Casting a critical eye over your existing processes and policies will help you identify inefficiencies, reduce duplication and create greater standardisation. Reviewing any out-of-date processes will also aid with Procurement compliance, not only internally, but through the supply chain.
All of these activities will help to save time and money in the future, earning Procurement their own budget and freeing up resources for other strategic activities.
Suppliers
Speaking to our supplier and getting out and seeing them face-to-face is a huge part of Procurement’s role, especially when in-person visits have been so infrequent. But without a budget for travel, how do you make sure your suppliers are still feeling the love when they don’t see you?
Luckily for Procurement, our suppliers feel the same way, so why not agree for them to come and see you? There’s also always the option of a virtual meeting, with the plan to meet face-to-face once time and money allow.
Forging closer relationships with key suppliers is another piece in the puzzle to creating value for organisations, and these relationships are built on mutual understanding (and a healthy dose of trust). Use your time to understand your supply base, align it with key Procurement and organisational strategy, and assess which of your suppliers will collaborate with you best.
Reduce Your Spend
It seems obvious, but you don’t need a budget to reduce your spending. Seek out agreements that have been in place for a few years and see if there are any that can be renegotiated. Agreements coming to end in the next 6-12 months should have priority, as you don’t want to end up in a new, automatic roll-on agreement without any input.
Getting key stakeholders involved here to review specifications, requirements and Scopes of Work helps to define what is actually needed, but may also help to prevent maverick spending by giving people more input to agreements.
Plan Ahead
Looking on the bright side, not having any budget isn’t going to last forever. Depending on an organisation’s performance in the first half of the year, investment, available funding or increased income, budgets may be reviewed mid-year, giving departments the chance to put in requests for budget for specific projects and strategies.
Not only will doing this allow the organisation to plan ahead and forecast for the second half of the year, but it also provides incentive to Procurement to continue to think strategically on how best to use investment. Whether this is sustainability initiatives, key supplier relationships, or investing in digital solutions, Procurement can detail viable ideas that align with organisational strategies and still keep developing, even when there isn’t a budget to help.
