What is 'Procurement with Purpose'?

“Purpose” is no longer something that’s nice to have for any business; it has become a must-have strategic imperative that should be high on every company’s agenda if they want to be perceived as relevant, admired, and innovative by their customers, employees, investors, partners, communities, and public entities. Consumers demanding full transparency on the provenance of goods and services they are buying.

The goal of every business is to do well. But with increasing frequency, they also want to do good. Businesses have begun to embrace the idea of going beyond the functional value they provide by aligning with a cause. And it’s being driven in part by the fact that their consumers are more socially conscious than ever.

Research shows that today’s consumers lean toward brands that have a higher purpose. If given a choice, most will purchase products or brands with a cause over one without. Green coffee, tea, cacao or cars with no, low CO2 consumption or clothes produces in factories with no child labor are examples. But social causes aren’t limited to consumer companies. Businesses across all industries are beginning to pursue them. And in many cases, procurement is leading the charge, tackling things like slaver, poverty and inequality.

Business networks can provide full transparency about all suppliers involved in the production process and the provenance of goods and supplies used. One of the most effective ways to stamp out things like slavery, poverty and inequality is through free markets like the ones created through business networks. Collectively, the Global 2000 spend $12 trillion on goods and services annually. More than 75 percent of these companies are for example connected to the Ariba Network. And by tying their purchases to purposes, these companies can ensure they provide fair labor practices across their supply chain. That they make opportunities available to minority and women-owned businesses. And that no slave labor is being used to make their products. And this is exactly why companies are benefiting by joining like

• Made in a Free World https://madeinafreeworld.com/, who provide software that enables companies to detect and eliminate slavery in their supply chains and connections to companies
• ConnXus, https://connxus.com/, who have a database through which companies can search for a certified, diverse supplier

Many organizations are already using our solutions to make an impact not just on their business, but the world at large.

Take Step up for Students, a Florida-based non-profit that has created a first-of-its kind digital marketplace through which parents and caregivers of students with special and financial needs can purchase education along with associated services and supplies in a simple, consumer-like way. It is leveling the playing field for education.

Emdadat which has created a similar marketplace through which medical providers and suppliers can connect and collaborate across the entire procurement process to increase their efficiency and improve quality of care across the Kingdom of Saudi Arabia.

Based on the information available business networks can provide the transparency and connections needed to connect the dots and beyond saving money and driving efficiencies, make a difference. Supplier risk solutions, for instance give companies clear visibility into the capabilities, performance, and social and environmentally responsible practices of suppliers that they can use to find the right partners.

Procurement owns the relationships to the suppliers as well as to the internal stakeholders. There is no better function in delivering value and integrate ‘purpose’ in all sourcing decisions along the entire supply chain of a company.

Are you already delivering value and purpose with your procurement function to choose suppliers that will help you make profit and a difference.?

Marcell Vollmer is chief digital officer of SAP Ariba and the former chief procurement officer of SAP.

SAP is the market leader in business applications; and SAP Ariba is the world’s largest business network, linking together buyers and suppliers from more than 3 million companies in 190 countries.

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