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Buying into change

Better procurement used to mean just cutting costs, but today businesses find innovation and collaboration are the key to improved efficiency.

While cost reduction has always been a key driver for procurement in organisations, today the need to reduce spend is even more keenly felt. Britain may no longer be in recession, but the Federation of Small Businesses Voice of Small Business Index for Q1 2016 found that confidence was at its lowest ebb since Q1 2013.

Factors affecting confidence include the introduction of pensions auto-enrolment and the national living wage. ICAEW and Grant Thornton’s UK Business Confidence Monitor for Q1 also reported an overall fall in positivity, with capital investment continuing to fall and employment growth easing. These factors add financial pressure to businesses, not least within procurement teams.

According to the latest global procurement survey from Deloitte, while cost reduction remained the top priority for procurement professionals, many are now placing a premium on better innovation and collaboration to create sustainable supply chains, particularly through greater use of technology.

This is an extract from the Finance & Management Magazine, Issue 243, May 2016

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