I’m often asked, “What should be my priority when looking at transforming the way I manage my organisation’s spend?” Unfortunately, with the current climate, i.e. ‘Brexit’, budget restraints and general cost cuttings, there is no single answer to this question or a Magic Wand!
The truth is many organisations wish to transform many parts of their business and this project scope can be enormous. There can be many drivers as to why transformation is needed and there can be quite a few boxes that need to be ticked for many department heads.
I recently read an article where ‘someone’ claimed their business alluded to having all the answers to help you achieve transformation; I sat and smiled thinking this chap thinks he is Paul Daniels (bring out the wand), and by the time I got midway through the first paragraph, decided I wasn’t going to waste any further time reading what clearly was not a true reflection on how transformation around spend control should take place. Which has led to, or hope that it has, given helpful insight and advice on the best approach to transforming your Spend Management.
So what is the best approach?
Many feel that it should start with restricting spend limits, as well as removing the option of payment cards, or even to continue to ask the Suppliers ‘pretty please’ for that better pricing!
Where the above does play a part towards spend control, it will only give you a tactical win. The focus on strategic spend management will effectively give you the control, transparency and long term transformation that you need.
Insufficient Supplier coverage
Within areas of the business, this will have a negative impact. It is key that the right Suppliers are available to the Buyers; Supplier onboarding must continue to be flexible to enable the organisation to tackle contract issues, new project requirements or the new direction that the business wishes to take. If the Supplier match isn’t there or isn’t flexible, how will this reduce Maverick or off catalogue spend?
Reduce the cost base
The resources to manage and maintain Supplier information can have a huge cost burden associated with it and it will impact other departmental projects and continue to overwhelm project planning. With unexpected price increases and poor enriched data, it’s often a resource and cost that is overlooked. This can have a knock on effect, lead to miscommunication within departments and generally cause time to be wasted when this can easily be avoided.
This should be a key element; the more time spent planning spend transformation, and ensuring that the right teams are involved, all can then contribute to making sure that the project has the maximum impact on all parts of the organisation. Change and progression does not need to soak up all the resource and time to achieve savings.
Improved Spend Control
Improving the quality of the Suppliers and the data within their catalogues is vitally important; having accurate pricing for the Buyers within the business, can capture far more spend, give better control, visibility and empower procurement teams with the data to negotiate better on those products with Suppliers.
Our Solution to Help
We have recognised the need for the above and as a result, have recently launched our Supplier Onboarding Module. This enables for a best practice process to help organisations tackle the fundamental elements to spend management and control. The accepted Suppliers with the approved, accurate pricing will simply be managed and uploaded.
This will free up resource, allow flexibility for new and existing Suppliers and take away the barriers for insufficient Supplier coverage, the cost base, disruption and level the playing field for all Suppliers. For more information click here.
If you would like to find out more about our solutions to help your organisations:View our Buyer Solutions Handbook
Alternatively, if I can help in any way please feel free to contact me.
By Richard Porter, Business Development Manager
Richard is a Business Development Manager at Science Warehouse. Richard works with Financial Directors, Heads of Procurement and pretty much anyone who will listen! The sectors that Richard manages are Housing, Local Authority and Government sectors. He works with organisations to identify their pain points and enable them to drive efficiencies and bring transformational change as they look to deliver better cost management.