BUSINESS NEEDS

WHAT ARE BUSINESS NEEDS?

Business needs and operational or functional objectives

All businesses have needs and by business needs I mean the gap between the current state of the business and its goals, that is, whatever the business aims to achieve.

If we look at business requirements from a functional or operational perspective then we can sum it up as;

1. The business requires certain inputs so as to undertake its activities and meet its objectives. These could be things like materials, machinery, supplies you name it
2. The people in need of these items or even persons in charge of managing such inputs will, upon noticing their lacking, notify the procurement department.
3. Finally the procurement guys have to ensure that they fulfill the five rights of procurement in relation to the business needs they are dealing with, meaning, they have to get products of the right quality, supplied in the right quantity, to the right place, at the right time, for the right price.

You look at that this and you easily come to a conclusion that the functional and operational objective of procurement as far as business needs are concerned is to provide the “right” inputs to meet operational needs.  The reality is that business needs are just as diverse as business objectives.

Business needs and overarching strategic and commercial objectives  

At a higher level, organizations have strategic and commercial objectives which means, just like at operational level, the business requirements here will have to correspond to the give objectives. The objectives in question could include among others;

1. Profit maximization which means that the business objective at this point is to achieve value or return for the shareholders. Remember these are the persons whose investment keeps the company going. In case of a business or an organization in the public sector, the needs could be the requirements or inputs needed to ensure the service delivered represents good value for money when utilizing the public funds.
2. The second objective is to achieve and maintain competitive advantage over competitor in the organization’s product or service. Competitive advantage refers to the edge your business or organization has over your competitors and this is what enables you to maintain or enlarge your market share.
3. The third objective could be to achieve and maintain cost leadership in a given market, by reducing and managing costs more effectively than competitors

The point is at higher levels business goals will always revolve around standing out in their industry which means, identifying and solving the kind of needs that will enable them to attain such goals. This could mean retaining high quality employees, supply partners and business allies among others