Services Procurement: Slaying the Sacred Audit Cow (Part 5)

Please click here for Part 1, Part 2, Part 3 and Part 4 of this series.

Sometimes soft factors matter as much as hard-dollar savings and value enhancement for stakeholder satisfaction in complex procurement categories. I'm reminded of just one case in the marketing spend area where marketing executives were able to truly see their relative spend performance in a competitive context jump out through a reporting suite that looked anything but a BI tool (the case, in fact, involved an agency – not the end customer!! – looking at competitive reporting software layered on top of a client's own performance-based spending information).

The same is true of other complex categories and in cases where advanced reporting and software is not necessarily required. For audit spend, as Procurian points out, some of the best examples of stakeholder and supplier satisfaction with the process are not just reduced expenditures or savings numbers but the transparency a better-managed category affords. This include the example of an audit committee chair noting that "he had never seen this level of detail in his entire career" and an auditor partner noting that the category management "process strengthened the relationship and placed everyone on the same page."

To get to this level of audit – and broader complex category success – we can distill tips into a number of key buckets. These include:

  • Asking all of the right questions of internal parties and stakeholders before starting a sourcing process
  • Understanding changes in the regulatory environment (at the same level as the service provider)
  • Investing the time to do a thorough benchmarking of rates up front
  • Asking the incumbent supplier for their perspective on opportunities to deliver better outcomes (and value) to the business
  • Understanding the type of work that your preferred suppliers want to perform and view as their competence
  • Negotiating all aspects of a contract and clauses as part of the sourcing process (beyond rates alone)
  • Setting up a reporting, benefits capture and overall performance management process to begin as soon as a new contract, SOW or rate card is implemented

- Jason Busch

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