Tackling complex (read: high value, high visibility and potential high risk) services categories is a theme that we've covered quite a bit on Spend Matters of late, and we plan to continue to explore it on a more granular basis than ever. Whether it involves a basic extension of foundational vendor management system (VMS) capability into basic statement of work (SOW) and project-based activities in such areas as systems implementation or facilities services/maintenance or something far more complex and high visibility, services procurement capability is becoming as foundational to procurement success as the ability to tackle indirect spending.
One of the highest visibility areas for procurement to pursue in the services arena is finance-specific categories, especially those touching on compliance and reporting. And within this area, audit (both internal and external) is certainly in the crosshairs. In a short whitepaper, The External Audit Opportunity, procurement managed services provider/BPO Procurian offers a useful quick take on the topic.
In framing the discussion, Procurian suggests that "taking a fresh look at external audit relationships can result in greater efficiencies, not only in terms of lower hourly rates – which may have crept up over many years? to far higher levels than first negotiated – but also in reduced hours." Among the foundational elements to driving success in the strategic sourcing and management of audit spend is effective benchmarking of rates to create both internal (i.e., stakeholder) and supplier transparency.
But as Procurian shows, benchmarking is just the ante. It's also critical to appreciate how the practice of conducting audits has evolved to gain sound sourcing and vendor management footing. Consider that "the fact that regulatory requirements have evolved [now] allows external audit firms to realize greater efficiencies and expend fewer hours on key external audit processes. Yet without asking, clients may never realize their fair share of these efficiencies." What are some of the best questions to ask? Stay tuned as we explore some of Procurian's recommendations in this series.