Procurement & Shared Services: Beyond Accounts Payable (Part 2)

Earlier today, we began to explore how to think outside the accounts payable (AP) box when examining procurement-focused shared services efforts. Spend Matters research suggests that procurement and supplier-centric areas with linkages to finance may contain the greatest opportunity for shared services efforts. Expanding on the examples provided by Fiserv, supply management organizations may wish to consider the following areas for shared services automation (whether outsourced to a third-party or managed internally in a centralized environment).

Supplier management (the basics): this may include supplier on-boarding and enablement (for both AP and broader P2P initiatives) including collecting banking details, contact details, insurance certifications, addresses, diversity credentials, etc.

Supplier management (advanced): building on the collection of basic information, advanced shared services approaches are likely to focus on areas such as risk management, environmental, health and safety (EHS) compliance, geographic specific compliance, offset/local supplier search/compliance and overall supplier master data management.

Leadership and skills development: procurement and finance organizations massively underinvest in the leadership and skills development for supply management activities. A shared services approach to skills development and leadership training that crosses not only procurement and finance but stretches to other parts of the business should be centralized and managed globally.

Vendor management/supplier performance management: Vendor management and supplier performance management are best suited to a centralized shared services environment (potentially managed or administered by a third party) which takes responsibility for related purchasing processes focused on supplier engagement. This must include the stewardship of the role as well as data management, analytics and information dissemination.

Of course a range of other areas may be fits as well for shared services approaches. As we observe, "within procurement areas, think about P2P, AP, transactional buying desks, capital expense buying desks, spot buying programs, vendor management offices and potentially other areas open to a shared services or outsourcing approach ... [but regardless of area consider the importance of] CFO (and higher) championing of initiatives." And of course category centric programs may be a fit as well (on an overall basis) in such areas as marketing, print, telecom, indirect and MRO.

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- Jason Busch

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