Business social networks are useful in the procurement process for improving communication

The procurement conference continued with a lecture by Krešimir Musa, director of consulting and implementation services at CROZ, during which he addressed the role of social networks in procurement.

– Business social networks can be used in the procurement process to improve communication, transparency, and innovation, but I will not only talk about them but also about the lean trend in business. It originates from Japan and is dominant in all industries I personally encounter related to corporate processes – Musa emphasized, explaining that the basic idea of lean management is a focus on continuous improvement of everything we do, which is achieved through the elimination of waste and excess.

The first type of waste is variation in quantities, the second is overburdening all participants in the process, and the third is unnecessary activities. Business social networks raise awareness that such problems exist, making them visible.

– In lean management, the focus is on value, and recently it has shaken classical business models where quality is rarely discussed. Lean insists that quality should be the focus, and here we come to business social networks that can enable us to talk about it. This is not about Facebook, Twitter, and similar networks, but about the application of social technologies in procurement business processes – he said, adding that CROZ has tried to move away from emails towards an internal communication network that employees can access from anywhere. They have tried to transfer as many internal processes to that platform as possible because it suits the young employees, most of whom are at CROZ.

– There are no more cc’s, bcc’s; everything is more transparent and clearer. Within each social network, you will find well-known functionalities, from forums to ways of exchanging data, and everything created on them remains as knowledge for the company; nothing is hidden in inboxes but is available to everyone, and that brings the greatest value. However, such networks will not thrive on their own; they need to be encouraged by mechanisms such as ‘gamification’, where points are awarded for good ideas and similar – Musa explained.

– To summarize, social networks motivate participants, increase transparency and knowledge, and are suitable for introverted people, most of whom are in IT (the audience confirmed that a similar situation exists in procurement). This encourages people to share their ideas that they otherwise would not dare to present publicly. Among us, the most introverted are actually the most active on the social network. Our example shows that this way of working has no negative connotations; on the contrary, we have gained a lot – Musa concluded, noting that social networks lack so-called ‘actionability’, or concreteness in task assignment, but this is resolved by combining the network with management processes.

At the round table of the Procurement Conference titled ‘Innovations in Procurement – Procurement in Company Innovations’, Srećko Bovan from Emerson, Vlado Prosenik from Efekto Pro, Hrvoje Pupačić from Rimac Automobili, Vedrana Šimić from ACG Lukaps, and Matija Šipoš from HT discussed. Bovan began by elaborating on what we are actually talking about when we talk about innovations.

– When we talk about business, we are talking about products, marketing, organization, and processes; these are the four closely related areas, and innovation can be in any of them. Every employee can engage in innovations, including those in procurement. We need to fight for procurement heads to be members of the management board and generally for the strategic position of procurement within the company to be better and more valued – he stated, adding that at Emerson, they buy innovations in products externally, but also work on them internally.

He asserted that savings in procurement are achieved through negotiations and then specifications, which depend on the competence of the people working in procurement, and therefore they are valuable to the company. Reflecting on the lecture that preceded the round table, he explained that solutions for internal communication are good for large companies but are quite costly, making them unsuitable for small and medium-sized enterprises.

Pupačić described how the procurement department has only recently been established and standardized at Rimac Automobili, and that they still have a lot to do as the company is expanding rapidly.

– In procurement, I have to be more proactive than some of my engineers; procurement is the one that must provide everything for them, and sometimes we can provide them with better raw materials and products, or connect suppliers with engineers at a higher level – he said, adding that he is satisfied with the position of the procurement department in the company. Regarding savings, he emphasized that they vary depending on the situation, deadlines, and market, and he highlighted the collaboration of procurement with other departments within the company as crucial for innovations.

Šimić recounted how the company she comes from has been owned by an Indian company for eight years, so most processes are centralized in India, but they also do some work at the local level. Since the takeover, they have been continuously growing, but they are also constantly changing and innovating.

– We are working on communication between teams, thus overcoming cultural differences. Procurement is very important for communication with suppliers; through it, other segments of the company receive new solutions that ultimately improve the final product – Šimić stated.

Šipoš recalled how the role of procurement was not so pronounced a few years ago, but the crisis fundamentally changed that.

– The very idea that costs need to be controlled is closely related to procurement, and how to present that to management is a tricky topic. We need to closely collaborate with other segments of the company, get involved from the beginning in the process because that gives procurement people broader knowledge – he said, adding that the most attention should be paid to the education of people working in procurement as it is crucial for savings and final results, and that this way, top experts are obtained who can work with everyone in the company to improve business. He assessed that the internal communication network at HT has proven to be extremely successful, but procurement still needs to maintain a degree of confidentiality, and for that, there are closed groups that facilitate the work.

Prosenik emphasized that suppliers are constantly innovating products and sales, and that procurement must follow that, otherwise, it falls behind.

– Our innovations must strengthen the position of procurement, and transparency is needed so that we can always work in a clean manner, so that suppliers consider us fair players, otherwise, we lose our reputation. This is achieved by simplifying processes so that as few details as possible are ‘hidden’. Regarding the education of staff, the best combination is knowledge of economics and expertise; such people are the most effective – he concluded.