We understand that within the organisations the biggest area of spend is in procurement, so how can directors – especially financial directors make sure procurement teams can provide more value back to the business.
There is a great level of investment needed to add value back to the business, however it represents a huge opportunity to reduce costs in the long term. To save money and gain back lost time, directors should be getting more control over their procurement process by placing efficient rules and frameworks to help the teams be more strategic.
…Because you shouldn’t be missing a thing in regards to your spend!
You need to have the full picture of spend to understand where money is going; understanding the whole scope of data that surround contracts that are in place with your supply chain enables more time to make decisions which can ultimately reduce costs and add more value to business.
Not having clear view of your spend can be real challenge for both ends of the procurement departments. There are a number of reasons why contracts are not managed completely;
…Whatever the reason, the problem is that the business is not getting the best possible deal for its investment. By gaining better control and management on all your business spends can in turn create necessary savings and spend where savings have been optimised.
The first point as a director wanting to make a change is to understand what your procurement team needs to provide more value back to business, what is currently holding them back? Why are existing processes not working for all individuals across the organisation?
Placing a centralised system which can be accessed and used by all individuals in the organisation enables spend activities to be tracked and analysed. Having a centralised system that manages all the contracts data allows procurement teams and directors to gain the full picture of spend and see a contracts life cycle.
Improving the end-user experience around how they handle contracts data can help ensure that compliance on purchasing activities is in place, as well as enabling better control on day to day data management and reporting. Using an effective system to manage and help carry out the procurement teams tasks will gain a better insight into spend patterns and help the team become more strategic.
Using cloud-based systems to handle spend data allows access to unlimited amounts of information. Business intelligence becomes richer and faster to access; having remote, off-premises access to information in fact lowers the cost of doing business in every part of the procurement process.
A business management system that centralises all contracts, dates, documents, suppliers and stakeholders can be a real opportunity for financial directors as it will provide longer lead time to negotiate improve value for the company or cost reductions with supply chains.
Directors can help procurement teams be more strategic by introducing better and improved procurement practices. Placing centralised cloud based contracts management system like ours, enables procurement, purchasing, materials managers and buyers do their job more effectively and efficiently as well as reduce costs in the process.
Implementing better practices with systems that can meet all your department requirements increases the value of your procurement team, as well as provides a large return on investment back in the company.
Learn more from our team and how innovative contracts management can empower your business.