Save Time, Cut Risk: Why Cross-functional Procurement is the New Competitive Edge

Guest post by Missy McClabe, Ramp 

Anyone who has gone through the process of onboarding a new vendor knows: Siloed teams can lead to lengthy procurement processes and inefficient spend management. It’s all too common that the key players–procurement, legal, and finance–operate in isolation, leading to long contract cycles and delayed launches, a recipe for frustration all around.

But there is a better way for teams to start building a smart and efficient procurement process. Before we dive in, though, let’s first take a look at the risks associated with the old way of managing procurement. 

The high cost of siloed procurement

What’s broken in procurement management today, and how can smart companies fix it? Traditional procurement processes often involve a linear approach and multiple different tools and systems. A business stakeholder identifies a need and submits a purchase order to procurement, procurement brings in legal to review the contract, and finance approves the spend.

Sounds seamless enough, but without full transparency across the process, this workflow can result in:

• Internal back and forth: Separate tools and systems, and poorly documented processes can lead to endless meetings, incorrectly routed requests, and reviews getting mired in confusion.
• Delayed contract approvals: When proper approval workflows aren’t clear, and stakeholders aren’t provided visibility into each step of the process, the time to onboard crucial vendors can be stalled – resulting in real negative business impact.
• Increased risk exposure: When early legal involvement gets missed, contracts can overlook critical compliance issues.
• Budget overruns: Finance teams brought in late may discover misaligned spending, leading to budgetary surprises.

These challenges not only hinder operational efficiency but also expose the organization to financial and legal risks.

From transactional to strategic: Evolving procurement’s role

Modern procurement teams are evolving from being facilitators of purchases to strategic partners in the organization, and that involves breaking down silos. Doing so can give them:

• Full cycle visibility: Engaging legal and finance teams at the outset of a purchase process ensures that contracts are compliant and financially sound, and that all needed reviewers know what steps are expected of them, in what order.
• Streamlined communication with all stakeholders: Using centralized management systems like procurement software Ramp and a contracting platform like Ironclad mean everyone involved in a purchase can retain visibility on next steps, collaborate and ask questions easily, and reduce the back-and-forth and toggling between disparate procurement systems.
• Data-driven decisions: When procurement processes, vendor payments, and contracts are standardized in one system, teams can easily leverage analytics to inform procurement strategies, keep tabs on upcoming payments and renewals, and ensure spend is never wasted.

With this evolved approach, procurement can become a hub of operational excellence.

Practical steps to enable seamless collaboration

To actively start breaking down silos and foster effective collaboration among procurement, legal, and finance, teams should:

• Standardize templates: Develop uniform contract templates for common agreements, such as vendor contracts and NDAs, to streamline the drafting process.
• Prioritize integrated workflows for maximum visibility: Create centralized procurement workflows with systems like Ramp and Ironclad. Ramp captures every purchase request in one place, automatically loops in the right approvers, and manages purchase orders, and its integration with Ironclad enables seamless reviews of those orders and associated contracts within the same procurement process. This way, all stakeholders are informed in real-time and executed documents are automatically synced and stored appropriately.
• Establish clear communication channels: Conduct regular meetings and updates to ensure all teams are aligned and informed about procurement activities.
• Train teams on collaborative tools: Ensure all stakeholders are proficient in using integrated platforms to maximize efficiency.

By taking these steps to implement smart procurement, organizations can transform their procurement processes into a collaborative, strategic function that drives value.

Cross-functional collaboration in action using Ramp

We’ve seen firsthand the benefits several organizations reaped after adopting an integrated workflow to increase visibility and collaboration, including:

• SAM Construction Group LLC, who implemented Ramp to combat inefficient procurement request and approval processes and were able to streamline their workflows, providing better visibility and supporting their scaling efforts.
• NPHY, who leveraged Ramp to simplify their procurement processes, saving time and improving transparency across their operations.
• Skin Pharm, who sped up their approval process from weeks to just 48 hours by shifting from a fragmented procurement process managed in Google Sheets to using Ramp.

Integration as a path to success

In an era where speed and efficiency are paramount, cross-functional procurement is a competitive necessity. By breaking down silos and fostering collaboration among procurement, legal, and finance teams, organizations can accelerate contract cycles, mitigate risks, and optimize spending.

The joint solution offered by Ramp and Ironclad exemplifies this approach. By integrating procurement and contract management workflows, businesses can achieve faster purchasing cycles, reduce overbilling errors, and gain real-time visibility into their procurement activities. Embracing such integrated platforms is key to unlocking the full potential of modern procurement.

Hear even more about achieving synergy between legal and procurement with our recent webinar Untapped Value.