FINANCE & SPEND
Before an organisation can fix a procurement problem, it has to admit it cannot see it. Industry research indicates that 20 – 30 % of organisational spend is outside of formal procurement management.
The Hackett Group highlights that 29 % of indirect spend is off contract, which can lead to organisations losing 5 to 20 % of their targeted procurement savings as a result of maverick spend and non-compliant purchasing.
“ Problems begin when data is scattered across too many systems, stakeholders and locations,” says David Renta, Global Head of Hedging at Convera.“ Procurement, finance, accounts payable and other branches of a business often have different views of the same supplier ecosystem. Increasing the complexity of a business with regionalisation makes visibility even harder to maintain.”
Those that are successful, recognise that spend visibility is not just a technology issue, it’ s a governance issue.“ Technology can help bring data to light, but real visibility comes from getting procurement, finance and business leaders to work together under a common model with clear accountability and consistent purchasing processes,” adds David.“ When organisations achieve this, they gain a clearer view of spending and unlock opportunities to lower costs, manage supplier risk and improve decision-making across the business.”
Matthias Bauer, Partner and Head of Discrete Manufacturing Americas at EFESO, frames the problem even more starkly.
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