Six Steps to Procurement Optimization
How are you doing as a company when it comes to these six critical areas of optimizing Procure to Pay operations?
It all begins with good data. Are you receiving the data necessary internally or from suppliers to make prudent and well-informed decisions? Quality timely data is the foundation for a successful procurement optimization strategy.
Well defined and communicated policies must be established to ensure your organization is strategic in its sourcing efforts. How do you communicate and train in the most effective manner? Strategy and policy must be adopted cross-functionally across the entire organization.
Many organizations are under staffed when it comes to a disciplined procurement process and personnel. What options are available to leverage other resources and to augment your people and results? External specialists help keep organizations focused on the core business tasks and to maximize profitability.
Look closely at the operational design and organizational structure of the procurement function. Is your process clearly defined, documented and communicated? All things must be aligned so that people, process and technology are optimized toward efficiency.
5. Technology Adoption
An effective e-procurement system can significantly improve process efficiencies. Do you utilize a defined catalogue or electronic invoicing? The proper technology solution(s) can eliminate paperwork, expedite contract fulfillment and control compliance.
6. Monitoring and Controls
Companies must identify ways to monitor and measure purchasing in order to determine ROI. Can you benchmark your procurement results against industry standards or other owner/operators? ROI should be benchmarked against business objectives to drive cost containment, NOI enhancement and performance metrics management.