3. Strategic Activity for the Purchasing Team
It is essential that procurement systems are intuitive, so that anyone who needs to make a purchase can do so easily and in line with policies that are set out by the organization. The purchasing staff will then be able to focus on their core, strategic value-add activity, such as contract management and supplier relationship management (SRM).
While the purchasing teams will still oversee audits, management reports and their day-to-day activity, most of their time will now be spent on strategic activity like the negotiation of major purchases and the setting up of long-term contracts.
Control over Indirect Costs
Gaining control over indirect cost is possible. Anglesey Aluminium a UK-based smelter of aluminium is a good example: The organization needed to report, monitor and control expenditure to deliver cost efficiencies. The P2P solution complemented the plant's existing manufacturing systems and addressed an area of spend that was previously difficult to control. It also automated the entire P2P process at Anglesey and replaced a manual system in which requisitions took up to 11 days to reach the purchasing team. The purchasing and management teams are now able to obtain information from the reporting, price and budget checking capabilities to analyze spend at all stages of the purchasing process, putting them in a better position to make decisions and drive accountability throughout the organization.
Because the organization now has complete visibility over all its spend staff have become more accountable and maverick spend has been reduced.
Integration, Control and Visibility
Integration of any e-procurement system into ERP, supplier relationship management or financial systems will ensure that employees have access to information that is complete, transparent and delivered in real-time. This is a major challenge for most organizations, but it is this requirement that will unlock the positive bottom-line impact for which so many businesses strive.
About the Author: Terry Wilcox is Commercial Director at Proactis, the Spend Control Company. www.proactis.com.