Every charity/not-for-profit procures goods and services, from the smallest new charity to those with multi-million dollar turnovers. No matter how large or small a charity is, the basic procurement processes are the same. The process entails identifying the requirements and suppliers, negotiating and awarding contracts, managing contracts and suppliers and monitoring the savings produced and benefits delivered.
Compared to a small start-up charity, larger charities understandably have more complex procurement processes, which will take longer to complete. When sourcing, for example, there will be a larger budget, more stakeholders and decision-makers involved. In order to ensure consistency, transparency, and control over the whole procurement process, most charities will have their own procurement processes with guidelines for employees to follow to ensure they get the best value from their suppliers.
What Is The Difference Between A Manual Process And A Digital Solution?
As with other areas within their charities, some of the larger ones will have already invested resources into a digital procurement solution to enable them to manage the procurement process in a way that will save them valuable time and money and crucially increase the actual percentage of donations that gets spent on front-line delivery.
The procurement process will be the same in a small charity, however, it will be less noticeable as it will be something they do subconsciously to get the best value from their suppliers.
Manual processes are often open to the risk of losing visibility and control over procurement, resulting in losing money and wasting time. Charities can help to deal with this situation by setting up policies and procedures.
Improved Procurement Processes
The majority of charities will concentrate on growing donations and hitting targets much more than they will pay much attention to procurement unless it pertains to goods and services that make a significant contribution to the cost of the product or service delivered. The charity will often miss the opportunity to save valuable time and money, as well as ensure they work with suppliers who share the same values as themselves. In essence, they will unnecessarily throw away some of their hard-earned money donations.
As the charity grows, the procurement processes will start to be managed using spreadsheets, calendars, and shared drives. Exactly the same methods that were used historically to manage client relationships before CRM systems became affordable and were made widely available to small and medium-sized businesses, not just enterprise-size companies.
In addition to the processes and desired outcomes, the budget and return on investment, as well as the employees’ willingness to use the solution are factors that charities should consider before investing in a digital procurement solution. Considerations may vary widely from charity to charity and also depend on a variety of variables, including how much supplier spend is under contract and what goods and services the charity delivers.
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