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Ways to maximize your Procurement Savings

Ways to maximize your Procurement Savings

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A complex procurement process need not necessarily be the best one for your organization. It could in reality turn out to be inefficient, blocking significant cost savings. The same goes for costly processes that may not be enabling the best deals with suppliers or provide vital procurement insight.

Most often, procurement is viewed as a low-level act of simply purchasing ‘things’ – as opposed to human resources or facilities management. This view is misguided as procurement is actually a high-level concern that plays a strategic role in the success of the organization. Among the basic needs for a robust procurement system are
  • An efficient coding structure that ensures that various people and departments associated with buying can talk to one another in the same language.
  • Implementing processes that focus on rationalization, ensuring multiple resources for potential suppliers – focused around a core set of common products and firms.
  • Treating accounting and procurement as equal and integrated partners.
Successful and efficient procurement requires a structure that will help businesses to unlock the benefits associated with smarter purchasing. Following are a few pointers that will help achieve cashable savings from the procurement process:

Standardise, aggregate and negotiate better prices

As sourcing specialists, procurers must typically negotiate contracts to create the best possible deal for the organisation and use technology to guide users to the best deals that have been negotiated on their behalf. Create an online shop window, maximising compliance and ensuring that the best value from negotiated contracts is achieved.

Rationalise suppliers, increase per supplier spend and negotiate better prices

Thousands of suppliers can be rationalised into a top selection of preferred or strategic suppliers, with whom organisations can start to automate the purchasing process and increase per-supplier spend. Enabling your top suppliers in such a manner helps to create a virtuous circle, where return spending with the same suppliers allows your buyers to negotiate far better prices.

Ensure you are sourcing from the most cost-effective suppliers

Comprehensive contract control, as a form of great business procedure, is fundamental to realising administrative savings and providing the platform for ongoing savings. Provide your procurement personnel with the right tools to achieve the same.

Reduce clerical administration

Asking your suppliers to send and receive procurement documents in an electronic format will ensure standardisation, as payment trails can be more easily tracked and traced. Advanced Cloud Invoicing offers a supplier-friendly way to send and receive electronic invoices. Invoices received via email are automatically converted into e-Invoices and loaded into the Invoice Register. The invoices are automatically ready for further processing without the need for manual data entry. By presenting all data in the same searchable format, employees across the firm can look up previous orders, deliveries and supplier invoices to ensure the best results are always achieved.

Consolidate similar orders for better pricing

Organisations that look to move away from this ad-hoc approach, and to consolidate similar orders, have achieved better pricing. Smartly-designed eProcurement ensures single orders across the organisation are made at the same time.

Create specialists to manage categories

Enhance your category management and get specialists within each category to purchase on behalf of the organisation. eProcurement can then be used to route requisitions across the organisation to these specialist category buyers. The result will be - right products at the right price!

Invest in tools that deliver procurement savings

eCatalogues, eSourcing tools that can be easily integrated with back-office systems, using standard technologies such as web services and XML, eInvoicing and eProcurement tools that will facilitate reduction in maverick spending and impressive unit cost savings will help a great deal in maximizing procurement savings.

Spend analytics – the key to savings

Top-quality spend analytics technology aggregates purchasing data and provides executives with insight into savings opportunities and compliance concerns. By comparing all purchasing across the organisation, your executives will be able to see when its people are spending more on specific items in each department. Analytics allows your business to act together and become stronger. With increased knowledge of spending comes the ability to create a single pricing structure for the business.

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