In the rapidly evolving business landscape of today, adaptability is key. As such, it’s no surprise that the concept of agile procurement is gaining traction across industries. In the face of increasing market complexity, this approach promises a more responsive, efficient, and effective way of managing procurement processes. But what exactly is it, and how can it be implemented? Let’s delve into these questions and more.
What is Agile Procurement?
Agile procurement is a progressive approach to managing the procurement process. It is less rigid, less process-driven, and more open and collaborative compared to traditional methods. This innovative methodology flips the conventional procurement frameworks on their heads, allowing teams to make faster, more informed decisions.
The term “agile” was originally borrowed from the software development field but has since found its place across various industries. It’s all about being able to think, adapt, learn, understand, move, and reassess quickly. In the context of procurement, it means becoming less orthodox and more collaborative and fast-paced.
Agile procurement builds on the principle of customer obsession and value demonstration. It encourages collaboration between all relevant stakeholders, fostering new ideas and promoting the consideration of alternative solutions.
What is agile sourcing?
Agile sourcing is a significant component of agile procurement. It is essentially a collaborative alternative to the traditional sourcing process, based on the agile methodology. This approach can result in higher-quality sourcing results.
In agile sourcing, the interaction with business units and management teams occurs frequently on an interpersonal level. Early involvement of end-users and suppliers translates to a faster process and better results. It eliminates the lengthy process of drafting, reviewing, updating, and rewriting the scope of work before issuing a Request for Proposal (RFP).
Traditional Procurement vs. Agile Procurement: Spotting the Differences
While both traditional and agile procurement aim to achieve a successful sourcing result, their approaches vary significantly.
Traditional procurement relies on slow legacy policies and processes involving predefined routine steps, heavy governance, safeguards, and extensive tracking. This method may be time-consuming and frustrating for multiple stakeholders, with procurement only attempting to safeguard company interests, ensure that mandatory requirements are met, and mitigate risks.
In contrast, agile procurement values speed and flexibility in the decision-making and execution process. It often involves a cross-functional team of stakeholders collaborating to make the process quicker and more efficient. Adjustments to the procurement plan occur at shorter intervals, and vendors may change throughout the course of the project.
The Benefits of Agile Procurement
Implementing agile procurement practices within your organization can save time, clarify workflows, and deliver faster and more valuable results. Some of the top reasons companies choose to implement agile practices within their procurement process are:
- Faster time to market: Agile procurement focuses on responsiveness and quick decision-making, leading to faster outcomes.
- Better supplier relationships: Agile favors partnerships over transactional vendor relationships, leading to higher-quality vendor interactions and more long-term partnerships.
- Stronger procurement workflows: Efficient process is one of the main drivers dictating time to close.
- Better procurement outcomes: The focus on agility and a trial-based approach to contract management with supply partners often produce better outcomes.
- Fewer friction points: The scrum master or project manager actively finds areas for improvement through sprints and iterations, meaning that the process of procuring becomes smoother over time.
Organizing an Agile Procurement Department
Reorganizing your procurement organization into an agile team or teams takes time and consideration. The agile approach relies on a specific hierarchy of team members and careful consideration of each project to ensure speed and flexibility in its execution.
The team’s makeup depends on the type of agile framework you follow. A common framework, Scrum Methodology, calls for four roles to carry out sprints and iterative work: the customer, the product owner, Scrum masters, and Scrum teams.
Implementing Agile Sourcing into Procurement
Agile sourcing can be implemented in several ways, including through the process framework, team structure, scoping and specification, and contracting. This approach requires a transparent sourcing process that focuses on delivering value rather than detailing how to take the next step.
Scrum is an application of agile principles that relies on teams delivering broader entities in short sprint cycles. A sprint is a limited period when a team works to complete a set of assignments. Working in sprints enables a feedback loop, continual improvement, and fast adaptation of plans with the change.
Increase agile procurement with Zapro
Boost your agile procurement capabilities with Zapro. Zapro establishes an optimal environment for seamlessly implementing agile processes within your organization. It facilitates close collaboration among teams, enhances understanding of the total value offered by preferred vendors, and more.
Explore Zapro’s features that streamline agile procurement:
- Centralized Contracts and Vendor Management: Zapro offers a centralized hub for contracts and preferred vendor features, providing customers with easy access to top-tier vendors and complete visibility into contract information.
- Effective Communication and Data-Driven Insights: Leverage Zapro for improved communication and data-driven insights that empower informed decision-making for current and future procurement projects.
- Quality Vendor Network: Access a curated selection of high-quality vendors through Zapro, ensuring that your procurement aligns with logistical needs while emphasizing speed and quality.
Looking for a more agile procurement process? Zapro eliminates the need for manual tracking, outdated procurement practices, and ensures the preservation of agility in your purchasing approach. Ready to transform your procurement strategy? Schedule a demo of Zapro today.