Being purpose-focused is essential to engaging customers and employees and being perceived as relevant, admired, and innovative by investors, partners, communities, and public entities. In this interview, which originally appeared in Business Reporter, Justin Sadler-Smith, head of UK and Ireland, SAP Ariba Cloud Procurement, outlines why procurement is the critical change agent in this process.
Everywhere you look, business is under scrutiny. Whether for environmental practices, labor conditions, tax, or paying suppliers on time, individual citizens increasingly are expecting companies to behave in a socially responsible manner.
This issue is no longer just for idealists or activists. For example, globally there are 46 million people worldwide who are modern-day slaves and about 150 million child workers. Any company doing business needs to make sure that its supply chain is not tainted by this cruel practice, and here in the UK, it is not just a good idea: it is now the law.
Eliminating forced labor from your supply chain is just one example of what SAP Ariba calls “procurement with purpose.” This is an umbrella term that includes social, environmental, and sustainability practices.
All business leaders need to be focused on these topics. Research suggests that companies that do so can significantly outperform their rivals over a 10-year period. Or look at it this way: Can you afford the reputational risk of a photo on social media of a child working at one of your suppliers?
The procurement department used to be a backwater, but it is increasingly being brought in to help protect the brand, run proactive supplier audits, and drive suppliers to support an ethical agenda.
The compounding fact is that your supplier’s supplier needs to be risk-assessed. With many companies having 10,000 suppliers, you see that even getting to the second order means millions of potential assessments – but it turns out that business networks are the way to solve this. By joining a network such as the Ariba Network, you can not only start to address the issue of “multi-tier,” but also select new suppliers that are aligned with your social goals.
Modern-day procurement leaders are starting to use the phenomenal buying power of their organizations to address some of these big social challenges. What legacy do you want to leave?
To find out more, visit www.ariba.com
This article was originally produced and published by Business Reporter. View the original article at business-reporter.co.uk.