Is Procurement only about savings? Here’s why it’s not!
Many of us think of digital procurement as a way to reduce purchase costs and increase efficiencies. While that is true to a great extent, what if we are losing focus on the bigger picture? What is the bigger picture, you may ask? Well, the bigger picture is where the real focus shifts to total cost and value addition. One example of value addition can be in the form of supplier collaboration and developing long-term relationships with them. It is just one part of what eProcurement is capable of beyond savings.
Another aspect of what makes digital procurement stand out is that of mitigating risk and increasing spend visibility. Many of us forget that while all these lead to a great amount of savings, there are important systemic aspects that can be missed if not paid attention to. Focusing on spend analytics is crucial and yet there are organizations that still do this at a rudimentary level.
Technological infrastructure has been a blessing in disguise for the modern procurement world. This essentially means that digital procurement automates the entire Purchase to Pay (P2P) cycle making it easier for everyone in the organization. The adoption of eProcurement has given rise to effective and detailed reporting which in turn helps in efficient spend analysis. With the help of this, your organization can dig deeper into analytics and extract data in ways you could never imagine. Afterall, it is always better to tell a story that is driven by numbers.
These are just a few examples of how procurement can go beyond savings. How about we see it in a different light? We know that every organization has different needs and might not do everything mentioned above. Every action you take will lead to an outcome and won’t you want that outcome to be that of savings? And of course savings is the outcome of all the above delivered through automation. But all of it should be given equal importance for an organization to see a change in the bottom line profits.
In one of our recent blog ‘3 Procurement trends in 2018 you need to implement today!’, we had discussed how the current trends in procurement are sustainability, innovation and simplicity. Although the end result might be savings, these trends are not direct savings but equally important in procurement. Similarly, factors like the skill set of procurement teams, technological infrastructure, vendor management, spend analysis and risk management to name a few are imperative too.
Here’s our take on certain aspects of procurement that can help organizations go beyond pure purchase cost savings.
Supplier Relationship Management
As an organization, you might be dealing with more than just a handful of suppliers. Therefore, it is necessary that you segregate or segment your suppliers as strategic and non-strategic. The segmentation can be based on their value addition in the long run. If they add little or no value then they are not your strategic suppliers.
They cannot be approached in the same way as non-strategic suppliers. The relationship with these suppliers needs to be nurtured over time and this can happen only with patience and perseverance, and of course, a close monitoring and preferential considerations that you can manage all in one place (a suitable procurement solution).
In our older blogs, we have emphasized the importance of supplier relationship management and how it will help your organization get better offers in the long run. Maintaining a healthy relationship with your suppliers is of utmost importance. Eyvo offers an eProcurement solution that is comprehensive with many tools to effectively build and manage relationships with vendors.
Managing risk has been an important aspect for the majority of organizations. As responsibilities, supply chain networks, and processes grow, so does risk. With the adoption of an eProcurement solution, you not only automate processes but also mitigate risk.
Detailed reporting and spend analysis are a crucial aspect in digital procurement as mentioned above. Yet, they are highly underrated. While they might have their own advantages when it comes to extracting critical data, another area where these reports are effective is in mitigation of risk. You can know exactly where the money is going and hence, avoid maverick spending. Additionally, since these reports are extensive, your organization can read trends and predict what future trends will be by analyzing the data. If there is a downward trend in the business, risk can be mitigated by taking respective measures.
With Eyvo’s eBuyerAssist, you can view detailed reports and analysis of spends which can help your company mitigate risks extensively.
Talent Gap in Procurement
We spoke about how your company can improve procurement efficiencies while developing talent. It sounds unusual and rightly so but having efficient procurement teams can boost your company’s profitability and have a positive impact on the bottom line.
Having a procurement team that understands the importance of alignment of the procurement strategy with the overall goals is imperative. A good team will mean that the negotiations happen smoothly which in turn will aid in building healthy supplier relationships. If allowed, they can also expand your network and use their analytical skills to make crucial decisions.
For all these reasons and many more, it is essential that an organization takes care of the talent gap in their procurement team and trains them accordingly for better results.
Technological changes can lead to drastic changes in an organization. It is essential that a company is adept at adopting to these changes. Being technologically advanced, especially in the world of procurement, holds a lot of importance and gives rise to newer and quicker solutions. This not only leads to saving costs but also will make the procurement process much more efficient in your company. When you are in line with the changes happening around you, it not only helps you drive down costs but also helps you save on precious time and increases procurement efficiencies.
With Eyvo, you can be assured that you will never fall behind on the recent technological changes. Our eProcurement solution is always up to date and it shows while you use our system.
Efficient eProcurement System
All said and done, if your organization lacks a good and efficient eProcurement software, all of the above implicit savings would not be possible. An efficient eProcurement solution boasts of functions and modules that can be adjusted according to your needs. A solution that can be customized for optimal use is what makes it stand out.
With Eyvo’s eBuyerAssist, you can experience digital transformation and customization that will ease you through in your procurement journey.
Contact Us to know more about our software and we’ll make sure that you experience what we mean by ‘beyond just savings’!