Streamlining procurement processes

Streamlining-procurement-processes

Who is in charge of purchasing at your company? More to the point, do you know what your organisation is buying?

Many different people are often responsible for a range of relationships with a series of suppliers. Managing that level of engagement can be an incredibly complicated task.

The focus on procurement has heightened considerably during the trying economic conditions of the past two years. Executives, particularly within the public sector, are under greater pressure to cut costs across their organisations which has encouraged them to scrutinise their procurement processes more closely.

What many organisations have discovered is that the tools to undertake such an analysis are often lacking. Procurement spending stayed flat through 2009, according to researcher Forrester (see further reading, below), just as the recession began to bite.

The lack of clarity became apparent in 2010, as analyst Aberdeen Group reported that as much as 21% of business leaders listed a lack of visibility into enterprise purchasing as one of their key concerns. But what also became evident is that the only way to address such procurement process concerns is through technology.

Proof comes in the form of research from Forrester which shows that sales in procurement systems grew by 12% last year and are due to grow by a similar amount through 2011. Business, then, has woken up to the fact that procurement is a priority.

Spending money to save money might seem a contradiction. But a relatively small, up-front investment will pay dividends in the long term. Implementing systems that provide in-depth spend analysis make it so much easier to identify potential cost savings before the money has been spent. This can result in annual procurement savings in excess of 10%.

Sometimes, you really do have to spend money to save money – and procurement technology shows how the right investment in a crucial area can tighten processes and cut costs.

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Dean Dickinson is Managing Director of Advanced Business Solutions, formerly COA Solutions. Dean has been in the finance software business since 1990. He was part of the senior management team at QSP/Arelon prior to the acquisition by COA Solutions at which time he became Deputy Managing Director for the business as a whole. Since the acquisition of COA Solutions by Advanced Computer Software Group in February 2010, Dean has become Managing Director for Advanced Business Solutions. He is a specialist in consultancy and has a strong knowledge of business processes within a high volume/high value environment.