Indirect Spend Management: Combine all Spend Items and Create a Win-Win Situation Jason Busch - March 11, 2015 6:46 AM | Categories: Analysis, Services and Indirect Spend, Technology | Tags: L1, Process and Best Practice As we continue our coverage of how to manage indirect spend more effectively, we come to 2 additional recommendations today, the first of which is to focus on all spend including items, services, projects, T&E and related areas. Part of the reason for this is that indirect spend has come a long way. Indeed, it is not just what we originally thought about putting through Ariba 15 years ago – i.e., paperclips and pencils. Rather, indirect spend (if you factor in services) represents virtually all non-employee costs that fall into the SG&A category – and that’s a very long list. Addressing it requires solution support that spans SKUs/items, services, projects, T&E and related areas. Within T&E, travel remains a significant “under area” of procurement influence for many organizations and a good place for procurement to assist in the hunt for value. Our next suggestion for targeting indirect spend centers on creating a win-win environment for all participants including suppliers. As we tell clients here, change your habits – don’t try to change the industry (or supply market). You won’t succeed in the latter. You need a win-win program by definition or else your project will suffer or fail. Suppliers are truly key to the bigger picture – address their needs at the same time as internal stakeholders and users and you’ll win. This includes understanding all the structures of a given market dynamic. For example, sometimes it pays to have a supplier hold inventory for MRO, although sometimes it does not. It also requires thinking through how to become a customer of choice through suppliers (an ironic but often pragmatic approach here is to work through GPOs for certain categories – which suppliers often like, in fact). Related ArticlesResults and Additional Analysis of AT Kearney 2014 ROSMA Benchmark Report Designing a Spend Category Taxonomy Properly is Harder Than You Think (Part 2: Go Deep)Designing a Spend Category Taxonomy Properly is Harder Than You Think (Part 1: Do This, Not That)Mega Spend Aggregation: 10 Ways to Supersize your Market Basket (Part 2)Mega Spend Aggregation: 10 Ways to Supersize your Market Basket (Part 1)Dissecting Spend Analysis: Pricing Variables and Cost First Voice Pierre: 12.03.2015 at 2:38 pm This is one of the ten strategies that we discuss in our SpendMatters PRO series on ‘supersizing your market basket’: http://spendmatters.com/2014/01/20/mega-spend-aggregation-10-ways-supersize-market-basket/ http://spendmatters.com/2014/01/21/mega-spend-aggregation-10-ways-supersize-market-basket-part-2/ Reply Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of follow-up comments by email. Notify me of new posts by email.