Page 34 - Logistics News - July August 2023

P R O CUREMENT

Why SA businesses should leverage trustworthy

data for better procurement choices

By Sameer Kumandan, Managing Director at SearchWorks

Mitigating the risk of procurement fraud and other irregularities is possible by
equipping organisations with the tools necessary to improve transparency, decision-
making and cost-effectiveness in procurement.

he procurement department serves as a pivotal entity equally important and all procurement activities must comply
within an organisation, entrusted with the monumental with the company’s policies and procedures, as well as
T task of procuring goods, services and works from applicable industry laws and regulations.
external suppliers. Its significance lies in ensuring that the
company gets the best possible value for money by making Instilling transparency and accountability
informed decisions that positively influence operations and To assist in their role as gatekeepers in ensuring that their
profitability while navigating a world of commercial complexities businesses only engage with legitimate partners and safeguard
and avoiding the pitfalls of fraud and other irregularities with against fraudulent practices, procurement departments need the
the potential to damage the bottom line and the reputation of ability to thoroughly vet vendors, perform company background
the business. In 2021, the South African Institute of Chartered checks and assist in crucial decision-making that ensures that
Accountants (SAICA) found that 70 percent of South African organisations can grow with complete confidence.
companies had experienced procurement fraud or irregularities
in the past year, while the Association for Savings and Measurable advantages of risk management in
Investments South Africa (ASISA) reported that R10-billion was procurement
lost to procurement fraud and irregularities in the private sector With the right platform, procurement teams can greatly
in 2020. enhance their influence over products, steering organisational
competitiveness, efficiency and profitability. Benefits include:
With these eye-opening statistics in mind, and in response • Greater transparency: Establishing systems that stymie
to increasingly tough economic conditions, procurement fraudulent actions, bolstering accountability and compliance.
integrity is more important than ever. Here, the strategic use of • Elevated due diligence: Protecting against interactions with
credible, dependable tools becomes paramount. By streamlining unsavoury entities, all while refining the sourcing, negotiation
procurement processes, reducing risk and boosting efficiency, and record-keeping processes.
procurement can make confident decisions based on solid data. • Better decision-making: Offering businesses the critical data
needed to evaluate suppliers effectively and reduce potential
Procurement: What’s the big deal? risks.
The procurement department is typically tasked with sourcing, • Cost reduction: Proactively identifying and curtailing
identifying and qualifying suppliers. This includes market procurement risks, thereby averting significant losses.
research, supplier capability evaluation and contract negotiation.
Once concluded, procurement is also responsible for placing The power of search
orders with suppliers, tracking orders and ensuring that Modern procurement strategies rely on myriad verification
deliveries are made on time and in full. Thereafter, procurement methods, from credit checks to ID verifications. Consolidating
is tasked with processing payments to suppliers and managing data is vital for fostering efficiency and precision in procurement
accounts payable. In addition, procurement also carries the practices. As businesses evolve in an ever-complex world,
unenviable burden of risk management and compliance. It is embracing innovative solutions ensures that procurement
their task to mitigate and manage the risks associated with departments navigate their many responsibilities with greater
procurement such as the potential for fraud, supply chain confidence – and ensures businesses operate more ethically
disruptions, quality issues and price volatility. Compliance is and efficiently. •

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