Who is a Procurement Officer (PO)?
Also known as a purchasing manager or procurement manager, a procurement officer is someone who is accountable for procuring goods and services for their organization.
Honestly, being a procurement officer isn’t an easy job. Because it is the procurement officer’s responsibility to ensure the enterprise spends wisely both money and resources. There is no doubt that this role needs a certain kind of skill set and often goes unrecognized and unrewarded.
In enterprises, the procurement officer usually leads a team of procurement experts or agents and often reports to a chief procurement offer (CPO). On the other hand, in small and medium-sized, the procurement officer doesn’t have any team and is often a department of one. In such scenarios, the procurement officer reports either to the Chief Finance Officer (CFO) or Chief Operations Officer (COO), depending on who takes the responsibility. Regardless of the size of the business, procurement teams should work closely with the finance, legal, and operations teams.
What are the Duties of a Procurement Officer?
Now that we have seen who a procurement officer is, let’s take a look at the duties of a procurement officer.
A procurement officer ensures that the enterprise makes wise decisions in matters related to purchasing goods and/or services to resell or use. Lately, the demand for the services of procurement officers has increased. A report from the Bureau of Labor Statistics says that the job opportunities for procurement officers are witnessing little to no change at least until 2024. Working as a procurement officer comes with many responsibilities that are vital to the organization’s success.
A procurement officer is responsible for overseeing the activities of the department that deals with purchases and sourcing. As a part of their job role, a procurement officer assigns duties to each staff member and reviews their work. In addition, they make plans for the purchase of new equipment, services, and other supplies. Thanks to their knowledge of procurement procedures, procurement officers can hire the right people for their department and provide them proper training in line with the procurement policies of the organization. Procurement officers can manage their team members effectively when they have thorough knowledge and expertise in relevant practices, procedures, and policies.
Purchasing goods and/or services
Activities related to the purchase of goods and/or services are completely managed by the procurement officer. They are responsible for checking the best products and services that have low prices within the options available. Along with the price, quality is also an essential factor that procurement officers consider while purchasing or approving a purchase. They ensure that the products and/or services are of high quality regardless of their price. For most enterprises, the procurement policies of the business are the foundation principles to approve such purchases.
Regardless of the type of purchase or what goods or services are being purchased, the procurement officer is responsible for accurately maintaining the records of all purchases. It also entails the responsibility of managing the inventories of the purchased goods and services in the organization. They need to maintain all the documents or data related to the organization’s vendors or suppliers. It is the responsibility of the procurement officer to make sure that their department has all the essential information such as which supplier is responsible for what goods, delivery times, etc.
Communication with vendors
A procurement officer acts as a bridge between the organization and vendors. They have to look for efficient vendors who can deliver high-quality products and services at low or best prices and negotiate the deal for the organization. An extremely crucial part of a procurement offer’s job responsibilities is to maintain a good relationship with the vendors as it can provide the organization excellent opportunities and get the best deals from the vendors’ side.
Ensure legal compliance
Another important responsibility of the procurement officers is to ensure every step or activity of the purchasing process follows the organizational policies and government regulations. For instance, a procurement officer who is working in a government institution complies with the State or Federal Procurement Policy Act.
Top 3 Challenges that procurement officers are facing
Maverick spend and lack of business engagement
For a purchase to be effective, procurement officers should collaborate with almost every department. Sadly, skepticism or uncertainty that most employees have about the role of the procurement officer often takes over. The result? Maverick spend. Also known as rogue spend or tail spend, maverick spend is any purchase that happened outside of the procurement process. Often, the products that are bought on maverick spend are difficult to account for and puts the business at risk.
Lack of technology leading to a time-consuming process
Currently, every business and every industry is embracing digital transformation, including the procurement department of all enterprises. One of the common challenges for procurement officers and internal stakeholders is the time it takes for the procurement process. Usually, procurement projects are the results of the activities that are keeping the business from reaching its goals. For instance, lengthy requirements research, unproductive or inefficient supplier communication, roadblocks in negotiation, etc. Now, all these problems can be solved with technology. It enables better insights, transparency process, efficient workflow, and RFP automation.
Strategic sourcing and vendor selection
As organizations start to understand the value of procurement officers and procurement teams can deliver, the better and more efficient the procurement process becomes. Not so surprisingly, strategic sourcing has lately been getting attention to assist in overcoming this challenge. Usually, the procurement practice focuses on choosing long-term vendors rather than transactional suppliers.
Strategic sourcing begins with choosing the right supplier. Often, RFPs compare similar suppliers’ experiences, qualifications, and capabilities from which the procurement officer will choose the right supplier by evaluating based on the said parameters. Procurement officers generally use the weighted scoring method to make sure the organization’s primary priorities are met. Of course, if done manually, weighted scoring can really be a time-consuming task.
Choosing the right supplier isn’t everything for a procurement officer. The story doesn’t just end there. Managing supplier relationships is an undervalued and underappreciated skill. A procurement officer continuously manages and evaluates each and every supplier’s performance to ensure the partnership benefits both of them. Fortunately, supplier profiles can assist in organizing and centralizing vital supplier information for quick reference and tracking.
Technology that makes procurement easier and simpler
Undoubtedly, there are a lot of cutting-edge tools and technologies that are available to bring digital transformation to the procurement department. These technological solutions target a comprehensive range of procurement activities from RFPs to supplier management.
→ Inventory management software
→ Supplier management
→ Compliance management
→ Spend analysis
The challenging and ever-changing role of procurement officers in supply chain management has robust potential as a career choice for people who are interested and familiar with supply chain management and operations and would like to expand their knowledge and skills in this field.