How can you achieve procurement best practice in your organization? In this article we look at what we think are the 5 most important issues to tackle.
Organizations need to have good spend visibility and understand what they are buying and how much they are spending. Many companies spend up to 20% of their revenues on frequently ordered low value goods and services which are too small to be managed by procurement experts. These complex indirect spend categories pose an opportunity for significant savings and efficiencies but they are often seen as too difficult to deal with. Claritum tackles this problem by streamlining sourcing, procurement and billing in one easy to use cloud based platform. The platform provides real time visibility of every transaction locally, nationally and globally.
Taking control of spend means tackling maverick spenders and enforcing compliance. The best way to do this is to set up central controls on localized buying with an automated approval system to ensure negotiated rates are utilised and invoices are processed efficiently. Buyers will readily accept controls if they have access to the benefits of an easy to use cloud spend management platform which makes processing orders easy, quick and efficient.
Models of best practice in procurement have progressed and this is particularly evident in the approach taken toward managing suppliers. Traditional supply chains often rely very heavily on manual proceses and operate on a model of squeezing a supplier to provide the lowest price and forcing them to compete in increasingly less rewarding environments. The new model of supplier management is all about developing good business relationships where everyone benefits. The aim here is to generate savings without sacrificing the quality of products or services. Implement a good cloud spend management platform to enable effective supplier management that drives savings. The platform should enable orders to be tracked and monitored and will make evaluating suppliers easier. Look for a platform that can also help you tackle tail spend as addressing this type of spend can lead to significant saving opportunities.
STEP 5Create Value
To really add value in procurement the best approach is to tackle what matters to your organization the most and focus on defining and measuring those goals. Typically, these goals include improving financial considerations (savings costs, improving cash flow, enforcing compliance), improving quality (delivering a reliable service, consistent quality of goods) and improving efficiency by utilising resources effectively. Many of these goals can be acheived by implementing the right sourcing tools such as a cloud spend management platform.
If you would like to achieve procurement best practice then contact us and we will help you tackle this.
Claritum’s cloud based spend management platform streamlines the buying and selling of complex products and services. Buyers, suppliers and experts collaborate in the cloud to improve spend visibility and control, achieve cost savings and efficiencies and to reduce risk and waste.
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Gaining Spend Visibility and Control of Complex Expenditure
For most organisations complex indirect spend categories pose an opportunity for significant savings and efficiencies but are seen as too challenging to address. However, savings of up to 40% can be achieved with the right approach.