Procurement with purpose: beyond the bottom-line

How can you embrace the notion of procurement with purpose authentically and in ways that are consistent with your core beliefs and ideals? Patrick McCarthy, SVP and GM, SAP Ariba North America, guides the way…

Sustainability improves the bottom-line and companies can do good while doing well.

In fact, research shows that purpose-driven companies with strong performance in environmental, social and governance outperform the market by 4.8%. But this is not ‘new’ news.

So, what is different now that makes purpose more vitally important? It comes down to transparency and trust.

In many segments of life, trust is at an all-time low. The swarm of misinformation, slanted stories / editorials and paid reviews have continued to foster these low levels of trust. This presents a unique challenge to companies:

– How do companies and we as leaders embrace the notion of purpose authentically?
– How do we do so in ways that are consistent with our core beliefs and ideals?
– How do we ‘walk the walk’ and not just ‘talk the talk’?

In the past, business leaders might have defined their goals as increasing profits for shareholders and owners. Now, leading companies are beginning to recognise that this is only part of the equation. They see the bigger picture and are taking on a higher mission to make the world a better place to live and work in. They are finding new ways to solve the world’s most pressing challenges. Gaining (or regaining) trust will happen through transparent action that demonstrates a commitment to creating a more purpose-driven business environment.

Purchasing with purpose

Those of us in procurement have a unique opportunity to lead the way. With increasing frequency, companies are redefining their supply chains and purchasing from suppliers who support, for example, people with disabilities or companies that are female led. Companies want to know that no forced labour is being used by their suppliers and their suppliers’ suppliers as well as all the way back up the value stream. Procurement is in the unique position to address these issues and have an incredible impact.

Collectively, the Global 2000 spend $12-trillion on goods and services annually. By tying their purchases to purposes, these companies can take a stand and drive ethical behaviour across the supply chain. And technology exists to make this possible. The key, however, is to get started. Business networks, for instance, provide transparency and insights into supply chains that enable companies to ensure that they are acting in responsible ways.

Take SAP Ariba, the world’s largest business network. Leveraging historical and real-time purchasing data, supplier intelligence and network insights, along with data and services from third parties, such as Made in a Free World, procurement can shine a light on materials, regions and suppliers to ensure that they are meeting the organisation’s standards.

Through a link between SAP Ariba Discovery, a global business matching service, and the ConnXus Database, buyers can tap into a wider pool of minority, woman, LGBT and veteran-owned businesses to enable global supply chains that are more responsible, sustainable and inclusive. Extending our network even more, we have partnered with Nicole Verkindt, Founder of OMX, to help our customers analyse the economic impact of their spend in industries such as the international defence, aerospace, oil and gas, mining, automotive and construction industries.

But it doesn’t stop there. SAP Ariba is a sponsor of the UN Global Compact’s Decent Work in Global Supply Chain Action Platform. The UN-developed Action Platforms accelerate the achievement of the Sustainable Development Goals. Action Platforms offer a systematic solution to sustainable development challenges via fostering new innovation, developing new financial models and identifying sustainable solutions across a range of issues. As a Platform Sponsor for the Decent Work and Global Supply Chain Action Platform, SAP Ariba has deepened our commitment to driving purpose across the global supply chain.

Procurement professionals will always be responsible for doing more with less and for delivering value to organisations. And we can do even more than that.

There’s real power in purpose. It inspires us. It moves us. It enables us to reimagine and reinvent what is possible and to achieve great things. It is also one of the greatest challenges issued to business leaders today. Join us in taking it up. Together, we can make a difference.


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