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As businesses around the world braced for the ramifications of the COVID-19 pandemic, it became clear almost immediately that supply chains would suffer a significant portion of its effects. Stressed for supplies and disrupted due to lockdowns and stay-at-home orders, many organizations struggled to obtain what they needed to operate effectively, especially in sectors like healthcare. According to Financial Management, 95% of business leaders said their companies experienced disruption to strategic sourcing and supplier management processes during the pandemic.

But the pandemic also shined a spotlight on the importance of the procurement function in maintaining both the resiliency and agility of the organization. Although procurement teams were met with many challenges due to COVID-19, they also approached those challenges with innovative ideas. It's through that spirit of innovation that procurement will help organizations emerge from the pandemic stronger in the months and years to come.

Optimizing Value Creation

Procurement experts have gone to great lengths to understand the trade-offs of focusing entirely on procuring goods and services at the lowest prices rather than procuring them at the highest value. By understanding their supply chains, today's procurement innovators can generate cost savings and reduce the risk of cost increases while also having a positive impact on company revenue.

Now, procurement experts have an opportunity to take value creation to a new level once again.

As noted, the pandemic has changed many aspects of the supply chain, but it has also impacted organizations' internal operations. Now is the perfect time for procurement teams to reassess their investments, especially in terms of indirect procurement.

For example, trends in remote work may make it possible for organizations to rethink their real estate investments and seek cost-saving alternatives for their investments in hardware and software. Procurement teams can also search for ways to reduce asset management costs, such as by outsourcing or replacing assets with more reliable alternatives.

Forming Stronger Strategic Partnerships

Procurement teams can also generate more value for the organization by forming stronger partnerships with suppliers and other parties. Suppliers are generally measured by cost, efficiency, and the impact of their products and services on revenue.

However, suppliers often have insights and ideas that can help the procuring organization better service customers or conduct operations more smoothly. Organizations that form supplier partnerships that fall outside the bounds of their traditional supplier relationships may have a strategic advantage. By working together on mutual projects, both the organization and its supplier can find innovative solutions to common challenges.

Procurement teams should start by analyzing their supplier base to determine which suppliers might be candidates for strategic partnerships.

In this context, a strategic partner is a supplier that not only delivers a product or service but also acts to add value in every interaction with the organization. They are more than just an approved vendor or a consultant—they are a trusted advisor that is invested in the continuous improvement of the organization, as well as their relationship with it.

Harnessing the Power of Spend Analytics

Spend analytics are already an important tool for procurement teams. But spend analytics solutions will likely play a much more integral role in the function moving forward. According to McKinsey & Company, 69% of procurement leaders consider digital and analytics solutions to be "even more valuable in the next normal than they are today, with greater potential to increase procurements effectiveness."

Spend analytics will be key to helping procurement prioritize value creation and identify opportunities for cost savings. More than ever, procurement teams must be able to integrate, clean, and categorize sourcing data so that analysts and leaders can make actionable decisions faster.

Data must be categorized effectively using deep, standardized classifications. From there, it can be enriched with metrics and benchmarking information, so that the function can gain full visibility into their spending. Ideally, a spend analytics solution should make it easy for decision-makers to acquire instant insights about savings, value creation, and opportunities for contract efficiency.

Investments in AI-powered analytics platforms and SaaS solutions could drive this trend and help make the organization more agile, even during times of disruption.

The ProcureCon Indirect Virtual Summit and Expo

If there is one lesson procurement leaders have learned from the pandemic, it's that the function will always play a strategic role in maintaining business continuity and resiliency. As such, there are strategies beyond those listed here that will define the next phase of procurement innovation and help organizations protect themselves from future disruptions.

To learn more about the future of procurement innovation, don't miss the next ProcureCon Indirect Virtual Summit & Expo, designed exclusively for procurement innovators. Happening online from May 18^th to May 20^th, you can register right now for free.