Overview

Innovation in sight – thanks to cooperation in purchasing

Innovations – almost mutated into a buzzword, they are nevertheless the catalyst of our society. Everything should be innovative, otherwise it has almost no meaning. From innovative ideas, products and services to innovative business models and innovative countries, everything is included. Somehow understandable, because the term alone evokes a lot of positive associations. Innovations promise something new and certainly something better. And it is highly likely that this can be marketed profitably. However, most companies have a problem: they don’t find it easy to develop innovations.

Purchasing could play a key role in the future and become a driver of innovation. This is because it already has a broad horizontal and vertical network – within the company and beyond. Employees in procurement therefore learn a lot, they find out where challenges lie and become familiar with new technologies at a very early stage, which can serve as the basis for innovations. It is therefore increasingly becoming the strategic task of procurement to gather all impressions and inspiration and systematically pass them on. At the same time, they must not neglect their operational tasks – especially the handling of specific procurement processes. Of course, innovations have helped to automate many routine purchasing activities. However, the procurement of complex products and services in particular still requires the experience and communication skills of people.

Cooperation as the key to success

The ability to cooperate is therefore a key success factor for today’s purchasing department. From both a strategic and an operational perspective. After all, good cooperation makes it possible to achieve goals much more effectively, if at all. One example: it is becoming increasingly rare for companies to simply order a product or service from the standard range from suppliers. In order to be able to work innovatively themselves, individual solutions are required instead, which in some cases even have to be developed first. Naturally, the relevant specialist departments are involved in this process. However, the purchasing department manages and moderates the entire cooperation, which can sometimes last for years. The situation is similar for less complex procurement processes. Purchasing records the requirements of the respective department and coordinates with it, contacts various providers and obtains offers, evaluates the offers, discusses them internally and gives the providers feedback – and all this until the new machine or the new IT system is purchased. In a 2017 study, the Institute for SME Research confirmed that cooperation is becoming increasingly important for companies overall: of 1,400 managers in SMEs surveyed, 75% believe that closer cooperation within the company and 63% believe that closer cooperation with other companies is essential in order to successfully shape the digital transformation.

Conditions for good cooperation

However, it is also clear that collaboration means effort and doesn’t just happen. Especially when the cooperation partners are based in different locations – sometimes in different time zones. This raises the question of how optimal collaboration can work and what the critical factors are.

Binding standards

Everyone has their own preferences and habits. This is not a bad thing in itself – quite the opposite, because it is precisely this individuality that gives rise to creativity and therefore innovation. However, in order for different people to work well together, they need standards for certain aspects of cooperation. For example, there must be clear rules on how documents are created, named and filed. This is the only way to ensure that everyone involved can find their way around. It must also be defined how cooperation in purchasing is structured and which work steps follow one another. It also makes sense to define standards for decision-making. In purchasing, for example, this can be used to select the best offer from several – according to criteria that are comprehensible to internal stakeholders and suppliers.

Clear responsibilities

Responsibilities are closely linked to the standards. After all, it is not only important to know how the procurement process is structured in abstract terms. It must also be clear which person is responsible for which tasks, what their duties are and what powers they have. This ensures that the workflow is driven forward quickly and does not come to a standstill because nobody is interested in the next step. It must also be regulated who can issue instructions to other people in the process – for example, if deadlines for feedback are not met.

Standardized information basis

The people involved in a procurement process should be able to access a standardized information base. As a rule, it will be sensible and necessary to assign graded authorizations. All documents that are directly related to a purchasing process are affected – from the department’s requirements to the suppliers’ offers and the evaluation for selection. However, it is also important that those involved can always track the status of the process.

Communication

Even if standards have been set, obligations regulated and an information basis created – ultimately, every cooperation depends on communication between the partners. They need to discuss challenges and work together on solutions. And they have to send signals about the progress of the process. All of this can happen unstructured – for example in a phone call or in person during a meeting in the hallway. However, it is usually better to work systematically here too. This avoids misunderstandings and ensures that the sender’s message reaches the addressee.

IT is the means to an end

In short, it is crucial for good cooperation that the parties involved agree on clear guidelines and stick to them. This initially requires a certain amount of mental effort to find sensible rules in the first place. And it requires the will to comply with them, even if this sometimes seems difficult. If this is the case, IT solutions are a useful tool for implementing cooperation in purchasing on a daily basis. This is because they can be used to establish rule-based workflows and store information systematically.