Amazon Business: Procurement and Wider Company Collaboration

With procurement evolving from a back-office role to a key voice at a board table, it is being argued the function needs to become more integrated with other parts of a business to aid the wider success of a business.   Alex Gagnon, Vice President, Amazon Business WW, believes that better collaboration between sourcing can drastically improve outcomes.

“Given complexity and an uncertain business climate due to supply chain disruption and inflation, procurement decision makers across the globe see room for other parts of their organisations to improve their purchasing compliance,” he says. “This cross-team coordination with procurement will drastically increase to achieve better cost reductions, savings and ROI on a global scale.”

Reducing business risk 

This collaboration can especially benefit an organisation as it looks to reduce risks.  The Amazon Business State of Procurement Report 2024 suggests that 35% of senior leadership are committing to focus more on mitigating risks from economic and geopolitical challenges. ”Without this closer collaboration between procurement and other parts of the business, organisations will run the risk of a misused procurement function - and mismanaged cost reductions,” continues Gagnon.

Closer relationships with sustainability and technology 

With budgets expected to increase in the coming months, Aster Angagaw VP, Head of Strategic and Public Sectors, at Amazon Business is expecting procurement to continue to work even closer with sustainability efforts across businesses.  “Procurement teams globally will make a dramatic shift in how they spend their time, placing an added emphasis on pursuing ESG goals,” they say. 

“Already, the vast majority of procurement functions have mandates in place for certain kinds of certified purchasing, including half with sustainability mandates - but in 2024 those mandates will become commonplace and top priorities for procurement teams around the globe.”

With more AI-infused solutions becoming accessible for businesses, Amazon Business are also expecting there will be a closer relationship between procurement and technology. This is backed up by their State of Procurement Report, which says nearly all decision makers are planning to invest in their analytics technology. “As AI tools become more prominent and accessible, organisations will invest in analytics and insights tools, automation, and AI-driven optimization of purchasing decisions to improve efficiency,” says Doug Gray, Chief Technology Officer at Amazon Business.

“In our Amazon Business State of Procurement report, 98% of decision-makers globally are already planning investments or upgrades in analytics and insights tools, automation, and AI-driven optimization of purchasing decisions in the next few years. The same amount are interested in discovering or learning about new digital tools that could scale up their procurement operations.”

Make sure you check out the latest edition of Procurement Magazine and also sign up to our global conference series - Procurement & Supply Chain 2024 

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