Re-imagining The Buying Organization: Trends, Threats & Opportunities

The COVID-19 pandemic has severely disrupted the business environment around the world. In turbulent times, the natural instinct is to cut down costs and shelve capitalization plans for new projects.

The pandemic has seen businesses shut down, people lose jobs, and government impose lockdowns in an effort to cut down on the spread of Covid-19.

The pandemic saw most organizations switch to crisis-management and self-preservation mode to help navigate this unfamiliar territory. Most put in place technological enhancements that made them adapt and remain afloat.

Most traditional investments have borne the heat from the pandemic while the digital economy has seen exponential growth with some companies registering over 200 percent growth in value.

“There has been a big shift to e-commerce during the pandemic. Technology and innovation have been growing during this time than ever before. As KAM, we are making sure that more businesses realize this,” said Phillis Wakiaga, CEO of Kenya Association of Manufacturers (KAM).

According to Mr. Jeremy Awori, the pandemic has taught businesses across the world that they must be prepared to live and operate in a Volatile, Uncertain, Complex, and Ambiguous environment, and be agile enough to quickly adapt to changing realities.

One of the changes that organizations have adapted is lean purchasing, where there is less stocking but an agile and efficient procurement. This has seen the majority of them serve their customers effectively but at the same time protect their businesses.

“At Absa, we have not only looked at our internal procurement process but have also taken time to understand our customers in order to support them in the new reality. Through digitization and automation, we have a quicker turnaround time on the procurement process. This impacts our suppliers especially SMEs, whose invoices are settled within 14 days,” said Jeremy, the MD & Chief Executive Officer, Absa Bank Kenya PLC.

To help in responsible corporate spending, Jeremy said that Absa Bank Kenya helped in Value Chain Financing, that is, leveraging on payables and receivables the bank will solution corporates and SMEs on both secured and unsecured lending e.g. select receivable financing (taking recourse on key debtors in your books), Invoice discounting and financing of contracts won to a maximum of 80% value of the costs

The lender has also helped in contingent lending – by applying our trade instruments e.g. letters of credit, Guarantees, and ovalized bills, we can give irrevocable undertakings to your suppliers at the same time offering our clients peace of mind on the quality and timely delivery of the traded goods and services.

Jeremy said that the pandemic has also affected how projects are prioritized within organizations. “At Absa, technology became a priority area of spend as we ensured that our customers continued to transact digitally with no disruption and our colleagues had the necessary equipment to work remotely.”

According to Dr. Julius Muia, the Principal Secretary at National Treasury, procurement is one way to make sure that corporates spend wisely. “Procurement in the public sector is a wider area… But as we do this, we have the responsibility to make sure that we are responsible and accountable,” he said.

Dr. Muia said that there is a need that corporates spend a lot of time making sure that there are automated procurement systems in place. “This will help in making services smooth and cut down on losses.”

Investing in women

Women own 33 percent of the registered Micro and Small Enterprises in the country which is slightly above 500,000 businesses. Absa She Business Account which is tailormade for the needs of the woman entrepreneur, whether you are starting out in business or running a big corporation.

“We have committed to empowering over 1 million women entrepreneurs across the country over the next five years with requisite financial and non-financial support to scale up and take their businesses to the next level. This is an uphill task that will require a concerted effort with other stakeholders,” said Mr. Jeremy.

Absa said it will be worlding closely with the International Trade Centre (ITC), Kenya National Chambers of Commerce and Industries, Kenya Association of Manufacturers, Development Finance Institutions, corporate customers, among other institutions, to scale the impact of both financial and non-financial interventions towards women entrepreneurs.

Corporate Spend Excellence Forum 2021

Absa Bank Kenya is sponsoring the Corporate Spend Excellence Forum 2021 being organized by the Kenya Institute of Supplies Management in collaboration with the Institute of Certified Public Accountants of Kenya (ICPAK) and a technology company called Xetova inc.

Themed “Reimagining Corporate Spend Management in the wake of COVID-19”, the Forum is focusing on building the capacity of key spend decision-makers, managers, and their partners with the aim of helping them evolve and excel in this post-COVID-19 landscape.