The ripple effects of a well-oiled procurement team will be felt across the organization. When the business prioritizes streamlined sourcing practices, they also reap a host of benefits that extend beyond the department. In fact, a recent study by Ernst & Young suggests that indirect spend optimization can save companies as much as 25 percent on everyday spending.
So, how can procurement teams hone in on key areas in order to deliver the most effective results for the company as a whole? First, you must ensure that your team is equipped with technology that helps them carry out strategic sourcing practices. After the foundation has been set, help them implement these six best practices that will set the procurement staff, stakeholders, and company up for win after win:
- Cross-functional Collaboration
It’s imperative that everyone be on the same page from day one. Ensure that the entire procurement department has visibility into each project and that other stakeholders within the company have the insights they need. Create a transparent environment for suppliers and facilitate open communication. This gives the sourcing team and internal stakeholders the opportunity to track project status from start to finish together, as well as provide insight into the process for outside parties involved. Cross-functional visibility creates a more streamlined sourcing process from start to finish and ensures that no one is in the dark when it comes to an unanswered question or the status of a project.
- Project Prioritization
Invest some time in organization. When everything is laid out in an easy-to-view framework, it’s much easier to prioritize projects and the sourcing needs that go along with them. Prioritizing projects in the context of the entire company’s needs will ultimately be a time saver, and therefore provide a monetary benefit as well.
- Early Stakeholder Involvement
Good relationships matter. Bring stakeholders into the loop from the beginning to promote open communication and add buying confidence. Use sourcing technology to provide automated communication and progress updates. Stronger relationships and more clearly defined roles will also increase accountability and diminish bottlenecking in workflows.
- Real-time Visibility
There’s a reason people say that two heads are better than one. Improved collaboration in the procurement process increases the likelihood that issues will be flagged more efficiently. This, in turn, reduces errors, extra work, and even additional expenses. With certain software, it’s possible to message problems and assign requests to event owners in real time, thus further streamlining communication within the sourcing process.
- Spend Tracking
Keep your budget out of danger by monitoring it diligently. Use a robust sourcing solution to do this. Aside from reducing unnecessary spend, tracking costs can also bring attention to areas that need restructuring based on pricing changes and company needs.
- Requirements Gathering
Go above and beyond by gathering additional data that’s pertinent for the business — but use your sourcing tool to make the process simple and streamlined. By putting together critical requirements and specifications prior to jumping into a sourcing event — and using an automated sourcing tool to organize the data as it comes in — you can be sure that you’re sourcing the right supplies with the ideal vendors without any manual work combing through RFPs throughout the procurement process.
Procurement can’t and shouldn’t do it all alone. By acquiring a procurement sourcing solution and implementing these six practices, you can count on setting up all stakeholders for future success.
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