A globalised, steadily digitising marketplace that is still fighting to emerge from recession is not an environment in which your procurement division should be functioning without visibility into demand, suppliers, and compliance levels. It’s clear that inefficient, non-standardised procurement constitutes a fundamental risk to your sustainability because it impairs your ability to operate and erodes profit through spend for which you cannot adequately account.
Research by the Aberdeen and Hackett groups shows that world class procurement teams have 71% of procurement spend under management, have 86% of their purchase orders compliant with contracts, are achieving 8.3% incremental revenue from supplier innovations, have 60% of invoices paid early enough to secure discounts, and need only 5.3 days to process an invoice from receipt through to settlement – at an average cost of only US$7.78 per invoice. A centralised, highly automated procurement system enforces compliance, reduces cost, and ensures that you always have the most affordable means to produce. Take a look at crucial arenas in which your organisation could be benefitting from specialised procurement systems.
With the right procurement system your employees will have access to intuitive, automated, and integrated processes. This allows them to be fully productive. This is especially true with the increasing emphasis on green procurement, which brings with it a proliferation of global and regional regulation that must be tracked and complied with. In the modern, digital era of business inefficient, non- standardised procurement is an entirely unnecessary financial and information haemorrhage. With the right systems in place, the bleeding cannot only be stopped but the organisation can actually turn procurement into a pro-active enabler of success.
Seeking out the right procurement will allow your organisation to standardise and enforce user adoption of processes to reduce costs. This includes preventing maverick buying by enforcing contract and process compliance and, in the process, maximising spend. Specialised procurement processes will allow suppliers to collaborate via onboarding, communication, engagement, and visibility. At the same time, you will be able to harmonise systems that will enable end-to-end processes and ensure lower total cost of ownership.
By Jeetendra Fakir - Supply Chain Management Business Unit Manager, Britehouse