Challenges and opportunities of social procurement

Due to high stakeholder expectations and worsening societal challenges, companies come increasingly under pressure to become more socially responsible. In recent times, companies have assumed this responsibility by incorporating CSR into their core business and value chain. Hereby, social procurement is considered as a suitable measure to embrace CSR throughout the supply chain. In particular one type of social procurement - the procurement from social enterprises - enables companies to make a positive impact while achieving internal CSR goals. Whereas in the public sector, this practice has been already established since the last century, in the private sector it is still in its infancy. Except for some policy papers, and publications from social enterprise bodies, no in-depth research about the challenges and opportunities of implementing a global social procurement in a company has been conducted. Therefore, the aim of this study is to create an overview of measures and actions taken by SAP, one of the largest multinational software companies worldwide, in the context of its social procurement initiative “Procurement with Purpose”, and to identify key challenges and opportunities, in order to develop key recommendations that improve the implementation of the initiative. For this purpose, in this thesis, public and internal data of SAP was analyzed in a first step. Based on this, in-depth, semi-structured interviews with experts from SAP’s social enterprise suppliers and partnering social enterprises intermediary bodies were conducted. Parallelly, an online survey was sent to collect responses from selected SAP employees, from procurement as well as business side. The aim was to gain holistic insights from relevant stakeholders of the initiative, from both, an internal as well as external perspective. Based on a developed category system, subsumed under six identified areas of social procurement, it was proven that there are differences in the prioritization of different areas of social procurement between the social enterprise sector and SAP employees. However, they main challenge for both samples is the initiative’s actual implementation in practice. Based on the insights gained, recommendations for action were developed considering both, strategic and conceptual, as well as concrete and practical ideas. Based on this knowledge, it is recommended for companies engaging in social procurement, to conduct regular interviews and surveys with relevant stakeholders. The results also suggest doing a follow-up investigation at SAP, measuring the success of the recommended actions. This thesis helps to understand how companies can successfully integrate practices related to the procurement from social enterprises in their organization.