Social Media and Procurement

Over recent years social media has revolutionised the way that people interact with each other, at both an individual and a global level. Businesses have recently begun to leverage social media, transforming the approach that they take to functions such as sales, marketing and their customer handling.

Now firms are beginning to see that social media can also be used effectively by procurement, offering an unparalleled level of opportunity for collaboration and information sharing which, if harnessed, can offer huge performance improvements.

These improvements can be broken down into three separate areas:

• Efficiency: Social media offers information on tap and enables users to exchange their relevant knowledge, discuss specific topics and raise or address any immediate concerns in a controlled setting. Social media can be used to reduce the time people spend chasing each other down, allowing them to spend more time working effectively.

• Innovation: Social media allows procurement professionals to engage suppliers directly and manage the information flow back and forth in an efficient manner. Such an approach provides an open platform for change which can help speed up the innovation and development process. Bringing suppliers into the innovation process as soon as possible, or enlightening them to a problem that needs to be solved, encourages collaborative working and helps foster strategic partners.

• Decision making: It’s important for procurement professionals to stay up to date on relevant suppliers and their offerings. Using public forums available on social networks, procurement professionals can study what suppliers have to say about industry issues, new opportunities, upcoming trends or market expansion plans. The information can also be used to give procurement professionals deep insights about the general supply market and help them mitigate risk in their purchasing decisions.

New procurement professionals are active users of online communities such as LinkedIn and Facebook and traditional technology providers are working to modify their offerings to include “collaboration modules”, bringing together traditional purchasing with social media. Although very few companies have yet adopted social media as an integral part of their procurement process this is expected to change in 2015.