New research on strategic procurement suggests that organisations are split down the middle on how they approach major spending and savings opportunities. So, which side are you?
Results from the Impact of Strategic Procurement 2017 Survey
have revealed a picture of 'haves' and 'have-nots' among global enterprises, national companies, public sector agencies and not-for-profit organisations. But the differences don't relate to budget or technology – it's about approach.
Most organisations today recognise that gaining control and visibility of their procure-to-pay process can lead to stronger budget management, compliance and cost reductions. But researchers discovered that a striking divide exists among organisations over whether their Chief Finance Officers are actively using their influence and joining forces with their colleagues in Procurement to make this happen.
Organisations are split down the middle.
These fresh findings suggest that company collaboration still has a long way to go and an old mindset around territorial boundaries may be alive and well in many boardrooms. It's almost as if inefficiencies within the procure-to-pay lifecycle may be seen as someone else's problem, rather than everyone's responsibility.
However, the report sounds a warning that inflexible attitudes could spell doom in today's new economy where traditional players are under threat. They face newcomers armed with highly-responsive, web-enabled tools and processes that ensure waste of any kind isn't tolerated.
Alliances at the highest level between Finance and Procurement can have a huge impact on the success of supplier relationships, sourcing and contract management. Improvements arise when departments unite to change attitudes, refine procurement policies to drive savings, and steer the application of enabling technology.
Conversely, when a joined-up approach is lacking, strategic procurement fails to occur. And it seems that some organisations are at least acknowledging the symptoms.
Two alarming figures jump out of the report: 45% of organisations are struggling to properly manage suppliers, while 77% of organisations concede they have room for improvement when it comes to strategic procurement.
Need to come over from the dark side?
Fortunately, the study doesn't simply highlight the problems – it suggests answers. Readers can follow five steps towards achieving strategic procurement to bring spend under control.
The report also suggests that quick wins may be within reach in areas such as reduced purchase costs from improved supplier agreements, savings derived from improved analytical capabilities, and gains through re-allocating the resources of full-time employees.
Is your organisation on the dark side? Are you struggling to see the light and join the dots between strategic decisions and cashable savings? Get your copy of the full report
and see why each issue matters to you and how it will impact your bottom line.