Procurement Intelligence Unit

If anyone had been brave, or imaginative, enough to write a script detailing the dramatic events of the past two years, then it's likely it would have been turned down by Hollywood's biggest film makers for being too far-fetched.

But while those in the corporate world would have needed the foresight of Nostradamus to have predicted the almost unprecedented collapse of the global economy, it has, beyond all doubt, illustrated just how fundamental risk management is to the procurement operations of both the present and the future.

For some, the turmoil sparked by the credit crunch and the collapse of some of the world's most iconic financial giants spelt the end of the road. For others, it provided an illustration of just how crucial market intelligence can be.

From supplier intelligence to commodity pricing, the past 24 months have thrown up a myriad of challenges that all but the most robust of procurement operations have been struggling to cope with.

Risk is, of course, inherent in almost everything that procurement does and cutting out risk entirely is all but impossible. However, what the recent past has demonstrated is that procurement intelligence can play a critical role in mitigating it in the areas over which procurement can exercise some semblance of control.

One of the by-products of the financial meltdown has been an increased need to focus on the here and now, in some cases to the detriment of long-term strategic thinking and forward planning.

"(In procurement) we're very often focused on doing the deal and where the current state of play is," a leading procurement figure told me in a recent conversation.

It's a statement that could probably be applied to a large section of those in the procurement community, particularly at the current time; but, more and more, companies are beginning to appreciate that procurement intelligence cannot just help overcome the immediate problems associated with an ever-more volatile market place, it can also help companies formulate a more coherent risk management strategy over the longer term.

With that in mind, there are increasing signs that firms are using the data that traditionally has helped them manage their day-to-day activities to allow them to look further into the future. And it's a trend that's likely to continue as procurement comes under pressure to highlight potential areas of risks moving forward.

In short, it seems that the lessons of the past are being harnessed to create a more certain future - and at present that's very welcome news indeed.