What Is Procurement and Why Is It Important For SME’s?

Every company, everywhere in the world is doing it. It’s the opposite to customer sales as its’ where the company is the customer being sold to. It’s been an important part of most larger companies for many years and its playing an increasingly important role in SMEs businesses.

Even though it happens on a daily basis, the purchase and management of goods and services is often overlooked by many SMEs as it just happens when it needs to. This approach may have worked well enough in the past, but things are changing as it’s becoming more difficult to protect profit margins, get best value from suppliers and work with suppliers whose values align with their own.

Just as the Sales and Marketing strategy is an integral part of every business plan to fundamentally make money and drive growth, so there is a need to protect this hard-earned money and the business against wasting time and money and exposing itself to unnecessary risks. Whilst at the same time ensuring that any values that are promoted by the company to its own customers are supported by its own suppliers.

Its therefore worthwhile for SMEs to develop a basic procurement strategy that incorporates supplier selection, contract management and supplier management. As companies grow, its far easier in the longer term, for these procurement processes to be documented and followed to ensure consistency and to give transparency and control over every part of the process to ensure the continued delivery of best value from the suppliers and to prevent wasting unnecessary time and money.

Creating a procurement strategy and these procurement processes is not as complicated as it sounds and the processes can either be developed in-house or by working with specialists, who bring in-depth knowledge and experience of working with SMEs.

The three parts of the procurement process can be either done on spreadsheets and shared drives or by using a procurement software that helps to automate the processes, maintains permanent records with audit trails and sends out automatic alerts to avoid wasting unnecessary time, money and risks.

There is one procurement software, oboloo, that has been specifically designed for SMEs that enables them to be in control of their supplier selection, contract and supplier management and to work with suppliers whose values align with their own. To learn more please visit www.oboloo.com