Agile Procurement: What It Is and How to Implement

Are you looking for ways to improve your procurement strategy in 2021?

There is no doubt that we are living through precarious times that have disrupted local, regional, and global supply chains forcing many procurement officers to find ways to adapt.

Procurement is not a static operation and must respond to the shifts in the markets.

Agile procurement is a dynamic methodology that has re-emerged as a leading practice during this coronavirus pandemic.

In order to fully grasp what agile procurement really is, let us consider the agile procurement definition. 

Agile Procurement Definition

The concept of ‘agile procurement’ is not a new one. The term ‘agile’ is one that has been borrowed from software development and now finds itself being used in a variety of industries.

The simple agile procurement definition states that agile procurement is a type of procurement approach that is less strict, less orthodox, and more open and collaborative.

It is a revolutionary methodology that turns traditional procurement frameworks upside down allowing for teams to make quicker decisions.

Agile procurement furnishes its adherents with a cross-functional type of model whereby new ideas, new ways of doing things are employed. There is a distinct breakaway from the ‘old-way-of-doing-things’.

But, just how different is agile procurement from traditional procurement? 

Traditional Procurement vs. Agile Procurement

Traditional procurement works on legacy systems and frameworks. Decisions aren’t hurried. Lots of time is taken with each of the procurement stages – identifying the needs, outlining the procurement plan, selecting suppliers, issuing RFQ, tender evaluation, contract terms & conditions, and supply chain management.

With agile procurement, on the other hand, time and speed are of the essence, so some steps are combined together – for example – contract negotiations can be entered upon during the sourcing process.

Where traditional procurement employs a large team of professionals, agile procurement may opt for a select handful of people to form a cross-functional team. Individuals are picked from the stakeholders. So on top of the procurement professionals, the agile team might feature IT, legal, customer representatives, suppliers, and finance experts.

In a nutshell, agile procurement provides greater efficiency, is more effective, and has a faster time to market speed compared to traditional procurement.

The Case for Agile Procurement

There are those who will argue, “Why attempt to fix the current procurement model if it’s not broken?” Why the need to bring a new procurement methodology when the current setup works just fine?

It is imperative to realize that agile procurement isn’t being promoted as an alternative to contemporary procurement. It is simply an ally, an aide to strengthen current procurement strategies. It’s there to compliment.

This is not to say agile procurement cannot stand alone and replace orthodox procurement methods if needs be. It can very well become an enterprise’s new standard mode of operation if so desired.

In a rapidly changing world, procurement teams are always in dire need of procurement models that are both ergonomic and demand less effort on their part so they are free to focus their full attention on their primary work roles.

Agile procurement is a favored model because of its lean and fast approach. Agile procurement shuns the legacy, “this is the way we have always done things” mantra, and instead embraces innovation and change.

Agile procurement is the future. In their CPO Rising Report, Ardent Partners wrote: “Agility will define the next wave of procurement success.”

And in fulfillment of this statement, the last few years have demonstrated the inherent power of agile procurement. Its multi-faceted, responsive, cross-functional, and proactive nature have shown to be just what is needed as enterprises address the changes in global markets.

The obvious advantages of agile procurement cannot be ignored and should be recognized.

Benefits of Implementing Agile Procurement

The superiority of agile procurement is seen in the following statements:

· Agile procurement enables businesses to make intelligent moves more quickly

· Agile procurement positions enterprises as strategic partners with room to negotiate

·  Agile procurement makes fundamental changes to company processes and technologies

· Agile procurement enhances stakeholder accessibility and usability

· Lastly, agile procurement metrics are easy to measure in real-time

Because agile procurement is all about speed, this approach relies heavily on procurement software and other IT infrastructure. This helps to centralize approvals and speed up procurement operations.

Conclusion

The changing nature of the procurement industry demands a new approach by CPOs and procurement teams. 

By adopting agile procurement methodologies, the entire procurement process can be significantly sped up. In order to succeed, however, innovative procurement strategy plus software are critical.

This is why you can never go wrong when partnering up with procurement software industry-leaders ProcurePort.

If you would like to discuss procurement software with a consultant, or to schedule a demo, contact us today.