Strategies for Improving Procurement Processes

Procurement processes are the workflows behind sourcing the external goods and services your organization needs to operate at its best. 

And as companies grow, these processes become more complex, demanding a tighter procurement management strategy. Without it, workflows slow down, become less consistent, and grow harder to govern. In turn, this critical aspect of your supply chain can break down.

Discover common missteps to avoid and how to improve procurement processes as you scale. Plus, learn how to sustain these improvements into the future. 

What makes strong procurement processes?

Procurement processes should take a structured approach to purchasing tasks, providing guidelines that team members can follow to work more efficiently and consistently. These strategic workflows:

• Clarify how to initiate and review purchase requests: All team members interacting with your procurement processes should have a clear reference on the proper steps for requesting purchases.
• Standardize supplier selection, sourcing, and onboarding: Establish standard operating procedures for choosing reliable suppliers that support cost-effective, strategic sourcing. Onboard suppliers so that they learn to correctly follow the steps corresponding to them in your procurement process and understand any platforms or formats you use.
• Align approval rules with spend thresholds and risk levels: Have clear rules on which purchases (due to high cost or risk level) require approval and which can automatically move forward. 
• Reduce manual work and off-system communication: Centralize procurement tasks and communication on a single platform so that approvals, purchase orders, and invoices never fall through the cracks.
• Improve visibility into spend, cycle times, and compliance: Having a centralized procurement platform provides leaders with better data on spending amounts, compliance concerns, and KPIs like cycle time, helping them run cleaner, more efficient processes.

Why procurement processes break down

Procurement processes can fail in even established, well-run organizations. Here are a few common situations that can lead to a lack of procurement efficiency. 

• Growth introduces more stakeholders, suppliers, and approval layers: As companies scale, they hire bigger teams. More stakeholders from a wider range of departments begin to influence the procurement process. This can lead to a "too many cooks" effect, in which different stakeholders introduce dispersed ways of working that serve their teams' needs but don't necessarily align with those of other departments or the organization as a whole. Approval chains may also become muddled, creating bottlenecks that slow down the supply chain. Finally, growing organizations also often need more suppliers—and interactions with them can become chaotic without the right tools and processes to manage them.
• Teams create workarounds to move faster: Teams want products quickly, so instead of researching established processes and approvals, they may take purchasing into their own hands. This can lead to each team having its own way of buying, or worse: individuals absorbing up-front costs and seeking reimbursement after the fact. With these disorganized workarounds, companies risk losing track of financial data and overspending.
• Policies exist but are not embedded into daily workflows: If companies have procurement policies that only live on paper and not in practice, teams are unlikely to follow them when making purchases. And when people don't follow rules, they jeopardize the company's compliance standing and budget.

Core procurement workflow improvement areas

Target a small but strategic set of high-impact changes, and transform your procurement management approach. Here's where to start.

• Request and intake management: Companies need a structured, user-friendly platform for receiving internal procurement requests, eliminating the chaos of various channels, like dispersed email chains. All users should undergo training on how to use the platform, learning what information to input into which fields, how to upload documents, and what to do in the case of special requests. 
• Approval workflows: When using a centralized procurement platform, organizations can automate approval sequences, ensuring that requests never get stuck. The system can also automatically approve routine, low-risk requests.
• Supplier and sourcing workflows: Organizations should also have a platform for suppliers, where they can store payment information, upload invoices, review purchase orders, and check payment status. Not only does this centralized portal keep data organized, but it also reduces back-and-forth between suppliers and your procurement team around simple questions, like when an invoice will be paid. 
• Data and visibility: By centralizing procurement data on a platform, organizations gain better visibility and leaders can more accurately forecast spending and plan their budget, resulting in cost savings. The company can also perform predictive analysis to gain clearer insights on their supply needs, improving the accuracy of inventory planning.

Common procurement process improvement mistakes

Streamlining your procurement processes is meant to improve them, not introduce further complications. But the reality is that procurement software implementations can quickly go awry if an organization:

• Rushes to automate: Automation works best when the underlying processes are stable and functional. If a company doesn't have established, proven procurement workflows, automations may just speed up the rate at which teams make mistakes or hit bottlenecks.
• Overengineering approval workflows: While approvals provide sound checks and balances, requiring too many of them can slow down procurement processes, delaying purchases—including routine ones that are necessary to daily work.
• Treating procurement policies as static documents: Policies should be regularly reviewed as a company changes. Processes become obsolete, and if team members or suppliers continue following them, the organization will create extra work for itself in correcting preventable request and invoicing errors.
• Improving one team’s process without aligning others: Organizations should perform holistic process reviews instead of just updating the procurement team's processes. Other departments, like accounts payable and logistics, will be affected by these changes, so their workflows must be modified as well.
• Failing to revisit processes after initial changes are made: After making improvements, organizations should assess their efficiency. For example, a company might train team members on using a new procurement software but not monitor buy-in after the fact. So, they won’t know if employees consider the tool difficult to use and create chaotic workarounds. But if leaders see that people aren’t finding the value in the platform, they can work to improve it and drive adoption.

Sustaining procurement process improvements

Improvements must be iterative to remain effective. Here's how teams can sustain procurement process improvements over time.  

• Make procurement processes easy to follow: Use clear, visually-driven documentation to transmit procurement processes to team members. Scribe automatically transforms your procurement workflows into user-friendly operational manuals, complete with screenshots, descriptive texts, and annotations.
• Reinforce workflows during onboarding and role changes: Leverage your procurement process documentation to enrich onboarding for new hires and retrain existing team members as they take on new roles and responsibilities.
• Review processes as business needs and supplier landscapes evolve: Procurement processes must be reviewed every time you switch or add suppliers or the business's ways of working change, so be sure to update your workflow documentation. Without these updates, team members will continue to run obsolete processes that can cause bottlenecks and errors. Scribe automatically updates your workflow documentation as processes change, so your teams are never referencing old information.
• Using performance metrics to identify when processes need adjustment: Don't only shift processes when taking on new suppliers or procurement software. Use data to find ways to optimize workflows, eliminating redundant, resource consuming work that eats up team members' time and can cause errors. And be sure to clearly document those shifts so that employees are always using the most up-to-date process guides.

How Scribe Optimize supports procurement process improvement

One of the most important procurement process best practices is reviewing the efficiency of your current workflows and optimizing where possible.

Scribe Optimize is the ideal companion in this process, enabling teams to operationalize procurement improvements and keep processes aligned over time. Scribe Optimize: 

• Analyzes procurement processes based on how work is actually executed across tools and teams
• Surfaces inefficiencies like unnecessary steps, rework, delays, and inconsistent paths
• Compares how the same procurement process runs across teams, regions, or roles
• Identifies where policies, approvals, or controls create friction without adding value

FAQs

How can procurement processes be improved?

Procurement processes can be improved by automating redundant tasks, using data to optimize workflows, and driving strategic supplier partnerships with providers that are committed to cost savings and keeping your operations able.  

What metrics should be used to measure procurement efficiency?

Track KPIs like purchase order (PO) cycle time, cost savings (negotiated savings), cost avoidance, and spend under management. 

How often should procurement processes be reviewed?

Review processes at least once every couple of years and during periods of growth, when acquiring new suppliers, or when shifting processes.

What is the biggest risk when improving procurement processes?

Poorly planned and executed implementations can lead to messy workflows, dysfunctional procurement software configurations, and a lack of user adoption (buy-in). Follow strategic change management best practices like careful, goal-driven planning, testing, training, and iterative workflow review and optimization.