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Is the Procurement team involved when it should be and able to perform this critical function effectively?

 
52% - High influence 37% - Medium Influence 16% - Low Influence
(70-100% of total spend) (40-70% of total spend) (0-40% of total spend)

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Identifying the right suppliers is a core activity of Procurement departments, so it’s no surprise that many departments are highly influential in this task.
However, these figures suggest that some organisations are struggling to influence supplier selection affecting vast swathes of their spend. They can go so far...but no further.

Every sourcing event is an opportunity to save money, mitigate risk and obtain the best possible overall value. Procurement understands this better than anyone else.

But without the right tools, selecting suppliers can become difficult or incredibly labour-intensive. So, while many Procurement teams are succeeding in this area, their best people may be too heavily involved in the detail — and therefore taken away from other tasks that also need focus.

Why does this matter?
Procurement departments need to achieve best value by selecting suppliers using systems that enable competition, consistency and transparency, while managing risk.

Organisations should focus on three key areas:

Establish or enhance sourcing policies





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It’s vital to clearly identify criteria for when purchases should be put through a competitive process; communicate procurement policies throughout the organisation and put in place controls to ensure policies are complied with.

More about Sourcing

Document standard sourcing processes




 



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Teams need to research internal and external best practices to define the process that the organisation should follow for various types of sourcing situations. They can outline the basic method, along with the key steps, people and documents required. Then it’s important to give your Procurement team the responsibility and authority to ensure the proper process is always followed.

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Consider cross-functional and cross-organisational



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Many organisations are establishing virtual ‘centre of expertise’ or commodity teams that cross over functional and/or organisational boundaries to act as the subject matter experts for various categories of purchases. Such teams bring together the best knowledge and experience from throughout the organisation and combine them with professional procurement skills for all important sourcing activities.

More about Procurement Control

Once these areas are addressed, then the right procurement system can support best practice easily and simply across your organisation.