Smart Saudi organizations invest in procurement to enhance economy

Dan Quinn

The regional economic slowdown presents an opportunity for Saudi companies to invest in strategic procurement solutions to bring down costs and drive growth, according to Dan Quinn, senior vice president at BravoSolution MENA.
He said these strategic, long-term investments align to one of the Vision 2030’s key pillars in achieving its long-term goal of a thriving economy.
“In tough times, forward-thinking, smart organizations invest in procurement to reduce spend across all areas of their business without compromising on quality. Even a slight reduction in overall spend which can be achieved through procurement excellence can impact the bottom line for the better,” Quinn said.
He added: “The savings made can then be put back into smart investments that strengthen a business’ outlook during an economic downturn. For a country whose vision clearly outlines its goal of ranking as the 15th largest economy by 2030 — up from 19th position — the bottom line savings of private- and government-owned businesses made though even a slight spend reduction, has the collective power to positively impact the GDP of Saudi Arabia.”
According to strategic procurement tech company BravoSolution, the single biggest cost for most businesses comes from procurement. By bringing down these costs, businesses will be able to increase (or replace missing) profits.
Quinn said: “Research shows that on average 60 percent of an organization’s profit and loss (P&L) is made up of third party spend, this is the materials, products and services that companies rely on to deliver their mission. It is the role of the procurement function to manage this spend effectively. Company executives know that reducing this spend has a disproportionate impact on their company’s economics as a dollar saved virtually drops straight to the bottom line and improves both cash flow and profitability. The trick is building the capability to systematically identify, unlock and critically retain these sources of economic value.”
Earlier this year, OECD said that despite modest pick-up in economic global growth, there are still risks and vulnerabilities that could derail market recovery.
“It is here that procurement services can successfully be leveraged for strategic decision-making and management resulting in an increase in profits as well as more streamlined business operations in the Kingdom of Saudi Arabia,” Quinn added.