Follow our 5 steps to achieve Procurement Maturity.
What stage is your business at? Businesses experience common problems which occur at similar stages in their development on the road to maturity. Identifying where your business is in it’s development can help you to assess your current challenges, such as where you need to invest time and energy and where you need to make strategic changes.
What is visibility and does your organization have it? Quite simply visibility is having a clear idea of what your business is buying, “who” your buying from and how much it is spending. Many organizations rely on manual processes which make it impossible for them to know how much they are spending.
If this is a problem your business has then solving this issue is the place to start. One solution is to carry out a spend analysis program to identify categories where your organization overspends and to analyse which suppliers are the best fit for your company. Implementing a cloud based spend management platform will make it a lot easier for your company to manage this process in an ongoing fashion.
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Having identified how much your business is spending, you will probably have discovered that there are some areas where you can make changes. You may need to implement controls into your business processes to ensure that you avoid some of the purchasing mistakes your organization has made. For example you may need to look at restricting the permission of who in your organization is allowed to purchase from particular categories. Your organisation may also need to renegotiate contracts and ensure that your staff purchase from preferred suppliers in order to reap cost saving benefits.
Organizing all of these factors might seem like an administrative nightmare. Many organizations get stuck in this phase because whilst they know there is a problem they don’t have the time or resources to deal with it.
The answer lies in introducing a sytem to handle the process smoothly for the organization. You can adopt a web-based, pay-as-you-go spend management solution (such as Claritum) to help you define a process for your business. This will enable frontline buyers within your organization to access historical information, such as past performance and product quality in real-time to help them select the right supplier and price for their needs.
Organizations in this phase know what they are spending and have implemented controls into their purchasing process. Now they need to work out how to optimise their use of resources. Your business fits in this category if you know you need to automate your business processes to take things to the next level.
Common problems for organisations in this phase include the need to free up sales staff from administrative tasks to focus on being more service oriented and adding more value to the organization.
Need to free up your staff?
Companies at this stage may be looking to address any opportunities that are being lost through ineffective collaboration with suppliers and will want to maximise savings and discounts.
Technology can play a key supporting role in delivering savings from suppliers by providing accurate intelligence and enabling truly collaborative supplier management. A cloud-based spend management platform like Claritum allows companies not only to track supplier transactions but to rate them on their performance. This approach allows buyers to build up a supplier profile over time that leads to more effective buying decisions and ultimately savings for the company.
A good example of a company in this phase was a fast growing financial services company who were looking to make cost savings and efficiencies. The procurement team needed a solution that allowed controlled, remote access and ordering capability for the entire user community within tightly controlled regulatory and spend limits. Claritum were able to help by implementing a Customer Catalogue to 5,000 users across the UK. Authenticated users were segmented by role based permissions to provide a high degree of control over who could view and order and what they could spend.
STEP 5Create Value
Creating value is all about providing a better, more flexible service to your customers and providing an efficient process for your employees.
Today’s customer isn’t always looking for reduced prices, sometimes what is more important to them is a smooth buying experience and a company that delivers on their expectations. The buying process has changed over the last 10 years. The internet has revolutionised the way we all do business today’s buyer is looking for solutions that make their lives easier.
Claritum’s solution provides web based storefronts and we have found that providing a familiar shopping experience for customers results in a high level of adoption and usage from customers leading to increased profitability and sales for the companies that implement them.