We recently conducted research with 250 procurement professionals and senior business managers, to find out what the tipping points are that lead organisations to invest in professional procurement.
According to the study these tipping points are being triggered by both upstream (supply chain related) and downstream (operational spend and invoicing) procurement issues.
So, what are the upstream pressures?
Upstream procurement management has become far more than simply negotiating best prices with new suppliers, or conducting ad hoc performance review meetings. Today’s supply chains have become increasingly complex and global and therefore choosing, managing and maintaining supplier relationships has become increasingly challenging.
And as supplier base increases in complexity, so too does the importance of effective management. Businesses need contracts reviewed formally, with triggers to avoid contracts rolling over unchallenged, and their information needs to be captured quickly into a central repository, and then checked regularly to reduce non-performance risk.
They also need clear relationship programmes in place to ensure strategic suppliers are managed effectively, with regular performance monitoring and review points.
Only by having a clear view of the supply chain can procurement teams anticipate any potential issues that may negatively impact the business. For those businesses looking to expand, enter into new markets or increase sales, ensuring the supply chain is ready and able to support changing business needs is vital.
Our independent market research into how a lack of procurement process impacts business growth showed that:
How software can help
Procurement software like Source to Contract solutions can support businesses in their quest for full upstream procurement control. These solutions can help standardise and automate all eSourcing and Contract Management activities, providing efficiency and visibility. Features like Electronic Auctions and Electronic Tenders can enable buyers to identify cost reduction opportunities as well as find the best suppliers for your organisation based on your needs whilst saving time and providing a fully auditable standardised sourcing process.
Contract Management software can empower your employees to gain control over all supplier contracts. A solution can provide your buyers with renewal and review reminders as well as a centralised secure cloud repository for contracts, which can be only accessed by authorised personnel. This means your organisation is minimising risk and reducing costs by stopping supplier agreements rolling unchallenged from year to year.
A full Source to Contract solution can give your team the power and time they need to become more strategic in their sourcing activities and help your business gain a better competitive edge. Making sure your organisation is ready for future expansions is no easy task, but the more prepared your business is the better competitive advantage you will be able to gain.
If you would like to discuss anything covered in this blog please contacts us and we will be happy to answer any questions or discuss any of your procurement needs.