There are many factors which make managing spend in an organisation difficult to get right, including:There are many factors which make managing spend in an organisation difficult to get right, including:
- Time and resource constraints
- Limited experience and expertise
- Lack of visibility and understanding of the actual spend
- Large numbers of diverse, unmanaged suppliers
- Uncoordinated buying resulting in missed opportunities to leverage
Combined with process inefficiencies and high administrative costs, potential benefits from procurement are eroded and your Return on Investment (ROI) will be reduced.
Companies often reduce their costs by focusing on negotiating better prices with their suppliers. While this can save money in the short-term, it is often unsustainable, and research shows it accounts for as little as 20-30% of the total benefits available from effective procurement.
Our approach is focussed on effective procurement that is much more than reducing supplier costs. Effective procurement is about partnership between you and your suppliers to identify additional value that contributes to the success of your organisation, through:
1. Lower operating costs
More efficient processes lower operating costs and improve cash flow. It also reduces the need for working capital.
2. Greater profitability
Cost savings and other benefits of better procurement directly contribute to bottom line profits.
3. Reduced risk
Better supplier arrangements improve the continuity of supply. This minimises business disruption and customer dissatisfaction.
4. Increased revenue generation
Leveraging supplier expertise to drive innovation creates extra value and opportunities. It also helps improve what you do and how you do it.
5. Improved organisational efficiency
Well-coordinated buying across your business provides greater agility and speed. It reduces overheads and allows your people to focus on their core business.
We can help you realise these benefits by our [approach] to strategic procurement practices and processes that go beyond just cutting costs.