Aligning Spend Control with Business Objectives – You Have the Power

eWorld Procurement and Supply this month placed a lot of emphasis on preparing for the future, and preparing for change. It explored the emerging trends and threats to procurement and offered some advice on how to tackle those challenges. One of the keynotes we attended fit this bill rather well: how to improve your procurement operation to deliver maximum value to your organisation, by making spend control part of the overall business picture.

Simon Dadswell of Proactis, global spend control and eProcurement provider, and main sponsor of the event we should add, talked about “Transformational Change – Linking Spend Control and eProcurement Actions to Strategic Enterprise.” He ran through what the solution offers and is capable of (which you can read on their website), and what people who want to make a real difference to their organisation can reasonably do to influence change.

He began by explaining how more and more organisations are taking action, finding ways to revolutionise their organisations through the latest technology. But, he says, it’s the difference between those that automate for quick wins, and the top performers that are sustaining success by transforming their processes. So let’s look at his more central takeaways.

The basic pressures on Procurement are the same as they have always been – what can we do to drive more value creation? Most organisations, in Proactis’ opinion, have some way to go in automated spend control adoption. But many are deploying or upgrading ERP systems.

Whether your organisation is going through change in response to a merger, a restructure, an outsourcing exercise or divestiture, it’s a golden opportunity to take a good look at and reassess spend control. They are likely replacing, upgrading or implementing the lifeblood of the organisation in the shape of ERP and finance systems, so spend control matters. It matters because it’s about all those processes and procedures that go on outside the ERP system, like POs, RFPs, contracts, quotations, or supplier information before they are even put into the ERP system.

If your organisation is branching out to new regions, it has to do this without losing control of its spend processes, it has to adapt to new ways of doing things while keeping control. These might be regulatory or legislative changes, or a sudden increase in invoice numbers but with one less person in AP, yet there must be no impact on financial operations. If the organisation is standardising back-office operations, policies, or procedures, or changing how it interacts with its supply base, spend control will bring them all together in a smarter way. If your company is divesting, then spend analysis has to be done to identify what goods and services are being split, who is buying what and so on. These are all good opportunities, don’t miss them, to take a closer look at spend and put automated spend control in place. This is not just to mitigate risk, ensure compliance, improve visibility and transparency, but to free up resource and unlock funds, all of which will accelerate the business transformation.

And the main reason for re-organisation is to gain economies of scale across the business, so the most valuable thing you can contribute is consolidation of procurement of goods and services. Done well it will augment your buying power.

So what can you reasonably do? It’s important to remember that it is You who can make a difference – you know procurement’s needs better than anyone, and the CEO knows that too; senior management look to you to help improve the organisation (even if that’s not made obvious).

Those processes outside of the ERP system all use information, of which you are the keeper. If transformation or reorganisation is required, it’s happening for a reason, not in a vacuum. Understanding what the CEO’s big issues are is important, because the innovation that will effect the changes that are needed, more often than not come from the organisation’s middle tier.

So - keep your enthusiasm. The power of enthusiasm will win the buy-in you need for new systems. And remember, think about practical, ‘doable ideas,’ that you can align to what the business is trying to achieve. It’s those that will come to realisation. Think about why the initiatives are what they are. Be ready to suggest specific spend control movements that will make a difference – at the right time. Then share ideas and best practice.

Organisations undergoing change easily overlook things like spend analysis, P2P, sourcing, contract management – it’s the ideal time for spend control to make the biggest difference. The tools will help you reduce costs, significantly increase responsiveness, throughput and reduce risk. And, it will help every function throughout the business.

There is also a good set of ebooks on the Proactis website – which you can download for free.

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