Greater innovation is making private sector companies more competitive in the long term, a research paper released by the Hackett Group has revealed. For many companies, innovation based growth has become increasingly important since the financial crash of 2008, and is now seen as a prerequisite for maintaining growth rates.
"This revised perspective on the purpose of innovation represents a profound break with the past, one requiring pervasive changes in every business services organisation, including procurement.” states authors of the paper Patrick Connaughton and Christopher S. Sawchuk. Although focused on the private sector, the report is also of relevance to public buyers, whom have the power to steer and encourage supplier choices.
More companies are now focusing on depth of innovation rather than price, with a shift towards viewing contracts as a chance to mutually benefit parties subverting the more adversarial stance of the past. Focusing on innovation-based business strategies and strategic partnerships can help to bolster the position of procurement within organisations, while a more holistic view of the procurement process can lead to greater benefits for all parties involved, conclude the paper's authors.
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