Your business’s procurement process affects every organizational department and will profoundly impact revenue. Consequently, being able to identify opportunities as they arise to bid on and maintain contracts with larger companies for business-related goods and services is a necessity for any modern procurement expert. According to The Business Reporter, “as a cost, procurement typically represents 30 – 70% of a business’s revenue, so getting it right can have a significant impact on their bottom line.” That’s why it’s important to keep the procurement process running smoothly by regularly reviewing what’s working well and what opportunities for improvement may exist.
The road to procurement improvement has many off-shoots; some are narrow changes which hone in on specific points in the process, like creating proper documentation. Other opportunities are broader and look at improving the process as a whole, like automation tools. Here are a few roads your procurement process could take to get to a successful procurement-to-pay cycle.
Procurement Process Automation
Implementing the right program can streamline your company’s process, making it easier than ever to create contracts, invoices and tracking shipments to improve efficiencies. Manual oversight can work well up to a given point in a company’s life, but is that the most efficient route?
Finding the right procurement automation system for your company can drastically free personnel to focus on other areas of needed growth. With the right e-procurement program, you can gather research, take a deeper dive into your spending data, verify deadlines and requirements are being met, and ensure you’re making the best vendor choices for your organization.
Supplier Contract Management
One example of the automation process is to automate contract management. Use technology to improve the procurement process by incorporating a contract management system. Let’s admit it: creating contracts is time-consuming, to manage the hundreds of vendors and figures that come with the day-to-day of procurement. Automating that process, as mentioned above, can streamline that process and free up your time.
Another way to improve contract management is to allow a third party to handle the negotiation and management of your contracts. A group purchasing organization will use their combined buying power to leverage discounted contracts on your company’s behalf without you having to lift a finger. Some GPOs give you customizable contracting options and insights into the data so you can keep an eye on the goings-on in the company.
Documentation and Data Analysis
At the end of the procurement process, it is time to make a decision. Proper documentation of one full cycle can give you insight into the next. Collecting and analyzing data will show weaker spots in the process that may be bleeding money. Points to include in documentation are your scoring process, consultation on the purchase and vendor justification. Include any due diligence that went into the decision-making process to show you did research and for comparative measures moving forward.
Sometimes it takes an outside eye to see opportunities for growth in your internal processes. At UNA Purchasing we are here to ensure your business is getting what they need for the best price, no strings attached. Learn more about what opportunities are available to improve processes within your procurement departs.