John Callan, Senior Director at Coupa
Procurement is a vital component to any successful business, much like the deal closing sales teams working on the other side of the organisation. But in many cases, procurement teams suffer from inadequate intelligence compared to their counterparts.
Sales benefits from an abundance of internal and external resources, combining data and analysis to make intelligent informed actions. Market research, customer profiling and a data-driven approach has created a focused and efficient business practice, recognised as directly impacting the bottom line and embraced by the entire business.
Procurement is more than capable of delivering these same contributions to an organisation. But in many ways it has been neglected, through a lack of understanding and operating legacy systems based on outdated ideas, holding back its ability to contribute greater value.
Yesterday’s procurement intelligence solutions are no longer viable. They were developed for siloed organisations and lack the ability to work cohesively with modern business practice. They cannot deliver the insight for procurement to be valued within an organisation.
Patchworks of systems, products and processes have created inefficiencies in the exchange of information between buyer and a supplier. The cumbersome and slow nature of these systems lack the intelligence business decision makers need today.
Parts of these systems have advanced over time, especially in payments. But this has not been part of a strategic and unified approach and the lack of integration fosters an environment of inefficiency and missed opportunities to optimise.
Implementing the right platform
It’s time for procurement to realise the benefits it can – and should – be delivering to businesses. Powerful technology platforms are available to procurement teams that can enable them to provide impactful insights that are equally as strategic as those generated by their colleagues in sales.
Business functions including sourcing, approving and onboarding suppliers and purchasing goods, can work together holistically as part of a streamlined process. Implementing smart, integrated solutions that not only simplify core procurement functions but also deliver valuable intelligence and create incredible opportunities for business.
For instance, using new insights to: create the most effective category plans, fair market pricing evaluation to maximise savings and analysis of consumption patterns to reduce overall spend, analysis of preferred supplier compliance, contract usage and buying channel distribution to address savings leakage.
These solutions can inform smarter business decisions and deliver applicable insight. Empowering procurement teams and business leaders to focus on the higher value functions of procurement such as negotiating contracts, monitoring supplier performance and strategic sourcing.
Data that drives decisions
Millions of data points are locked within the typical procurement process. But most of this data remains inaccessible and unused because procurement teams struggle to turn it into the actionable insights they need. That’s why it’s critical for companies to focus on increasing the maturity of their analytics and intelligence capabilities.
The best way in which to do this is by creating ‘open’ data systems that inform a business though a shared pool of information, unifying data resources to maximise the application of intelligence and impact to the business. Delving deeper into the data and creating actionable insights.
Data needs to be shared, analysed and available in real-time. It needs to be informed internally and externally, integrated through the business and taking advantage of third party and external sources of information. Through sharing information departments and businesses can see the benefits and drawbacks as they choose suppliers. Costs, delivery times, geography, availability and track/record.
Analytics, artificial intelligence, bots, community intelligence and other technologies can work together to improve procurement outcomes. For this to become a reality they need to share the right data and enough data to have an impact.
Delivering valuable insight
In today’s data-driven economy, procurement teams need to implement systems that leverage the abundance of data to deliver intelligence that can be turned into actions. This access needs to be at all levels of the business and gather all applicable data, in an open data system.
It’s of paramount importance for businesses to change their attitudes to procurement and work with platforms that can realise and deliver the value of data they require. Through a holistic view of procurement and open data systems in-line with sales, significant savings can be made, inefficiencies removed and with each step in the journey, analytics and intelligence can become more valuable to the business.
FIVE REASONS WHY YOUR BUSINESS’ PROCUREMENT TEAM SHOULD BE USING A CONTRACT MANAGEMENT SYSTEM
By Daniel Ball, business development director at Wax Digital
Even in today’s digital-first environment some businesses are still storing documents, such as contracts, in filing cabinets making it labour intensive to retrieve, manage and even identify important paperwork. In fact, it is calculated that poor contract management practices are costing companies an average of nine percent of their annual revenues.
Moving to a contract management system online can speed up the retrieval process and help decrease the amount of time and resources required to manage contracts. Using a CMS companies can create an online database to centralise information and store documents. Not only does this help ensure contracts are well managed and kept up-to-date, but it can also help businesses save up to 20 percent of overall costs per year.
From legal departments overseeing regulation compliance to finance teams ensuring payment deadlines are met, contract management technology benefits many areas of an organisation. So, how can a good CMS help your procurement team?
How will a good CMS help your procurement team?
The number of suppliers your procurement team must oversee varies depending on the size of your business. It’s not uncommon for large enterprises to be working with thousands of suppliers at one time. A CMS will use automation to record, manage and streamline data, providing procurement teams with important contract details including time and location information, as well as real time alerts such as contract breaches.
Here are five reasons why your business should be using an online contract management platform:
- Increased spend visibility
Using a CMS can give procurement professionals full visibility of suppliers, including the company name and location of where a product is coming from and in what quantity. This transparency will also help contribute to the risk management strategy of your business as it enables you to spot vendors who may be prone to environmental, economic and political uncertainty. In the current environment, for example, suppliers’ may have decreased or ceased production due to COVID-19 or could have been heavily impacted by the negative price of oil, making visibility increasingly important for businesses.
- Eliminates maverick spend
Centralising and streamlining contract documents will ensure that buyers can instantly access up-to-date information to see if a contract already exists. This helps buyers avoid simple and common mistakes that often occur when using manual filing systems, such as onboarding new vendors when existing agreements are in place with another supplier.
- Keeps track of contract renewals
It’s easy to forget about contract renewals or sign up for another term without ending an existing agreement, especially when using a traditional filing system. Businesses using an online CMS can set up renewal alerts in advance, allowing buyers sufficient time to source new vendors or negotiate better prices.
- Improves spend management
A centralised database means that all negotiated prices, contract conditions and other important transactions can be accessed in one place, making it easier to analyse spend. A CMS can help identify discrepancies, find where contract violations have occurred and deal with any associated problems.
- Adhering to regulatory and legislative compliance
It’s important to ensure that all suppliers are meeting the terms of their contracts. A CMS will automatically audit supplier information, meaning that any failures are immediately raised to procurement teams. The platform will also provide notifications if any new data is required or updates need to be made, avoiding potential legal issues.
It’s clear that using an online CMS will benefit your business and procurement teams by increasing spend visibility, enabling access to up to date information, ensuring contracts are closely monitored while contributing to the reduction of unnecessary spend. So, now’s the time to stop relying on those dusty old filing cabinets and start using a CMS.
PROTECTING YOURSELF AGAINST A RECESSION
James Turner, Director at Turner Little
The coronavirus outbreak has spread to businesses, leaving many around the world counting costs. Notoriously, known as the Great Lockdown, it’s been affecting the world economy since early this year. The predicted recession is considered to be the steepest economic downturn since the Great Depression.
So, what does that mean for you? James Turner, Director at company formation specialists, Turner Little, suggests “While there’s no fool proof way to ‘recession-proof’ your finances, establishing a solid base now will put you in a better position to weather the storm.”
“Whilst the future of the global economic landscape is simply too complex to predict, it’s not hard to spot imbalances that have built up, as central banks and governments around the world talk about introducing further fiscal stimulus and monetary expansion, the consequences could be significant,” adds James.
A good wealth management agent will recommend starting by saving a substantial cash emergency fund in a high-yield savings account, understanding your spending habits and where you could cut back if you needed to, and establishing your long-term investing strategy now, so you can stick to it.
If you were to solely invest based on the inevitability of a recession, you are likely to miss returns that are immediately available. If you truly want to recession-proof your assets, the best thing to do is develop a long-term strategy and invest wisely.
Diversification still matters
It’s dangerous to pile all your investments into a single sector, including consumer staples. Diversification is especially important during a recession when particular companies and industries can get hammered. Creating a diversified portfolio of assets blended across asset classes—such as fixed income and commodities, in addition to equities, sectors, geographies and strategies—can also act as a check on portfolio losses.
Build a reserve
To keep your money protected before, during and after a recession, it’s recommended to have an income generation conversation with a financial advisor. This will cover a lot of different topics, but one of the most important is the emergency fund. You’ve likely heard many times that it’s good to have between three and six months’ worth of living expenses set aside in the event of a job loss, health crisis, or other unforeseen circumstance.
Protect your assets
If you’re interested in talking about protecting your assets and your investment portfolio, do get in touch. We specialise in creating bespoke solutions for individuals and businesses of all sizes. The knowledge and expertise of our specialists will be able to assist with any enquires, no matter how complex.
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