6 reasons you're still stuck in procurement 1.0

| 0 Comments

JulianHarris.jpgEvery business desires growth and success. They set targets to support the overall objectives of the GDP. However, it is natural to encounter many roadblocks along this journey and procurement is seen as an important area as it can block or support growth.

Procurement analytics provider Robobai surveyed 250 procurement specialists and asked them what their pain points are within a growing organisation. Sharing the results, Julian Harris, Robobai chairman and founder, shares the top-six reasons an organisation might be stuck in 'procurement 1.0'.

1. Companies had outgrown their supplier base
79 per cent of the people we spoke to said that their businesses were not driving innovation in supplier relationships. The common theme being their existing suppliers were not adept enough to support their growth model and that they did not have the correct systems in place to evaluate potential new supply partners in an efficient and fast manner.

2. Current systems were inadequate
85 per cent of our survey respondents said that their overall procurement process was too complex and resource heavy. The existing systems and processes simply are not up to the job and as a result Accounts Payable is constantly battling to keep on top of the processing and payment of invoices.

3. Current systems are poorly equipped for investment or acquisitions
According to our results, 76 per cent of procurement specialists said that with their current systems and processes, they would not be able to provide the relevant due diligence to any potential investors. This is a massive barrier for any company that is looking to expand in any way.

4. Failing to manage rising costs
81 per cent of companies admitted that they do not challenge suppliers enough on cost or performance. The truth is, they are struggling with rising costs against income, which is affecting profits, but they have inefficient systems in place that do not enable them to manage their supplier contracts properly in these areas.

5. Ineffective supplier management
44 per cent of our specialists said that they need to manage their suppliers more effectively. They basically do not have access to enough good quality data on suppliers to allow them to effectively challenge and negotiate the best deal for them.

6. Insufficient control over spending
In our research, 40 per cent of respondents said that they need to improve their budgeting controls. There are compliance issues surrounding using approved suppliers. To fix this requires a change to their systems and culture to give the required visibility of spend.

Is data really the answer?
For optimum results, you need optimised data.

The benefits of good data are no secret. You will constantly read and hear about how powerful data can be with regards to driving efficiency, reducing costs and keeping customers within any business. But, in the world of procurement it is a must have. Why? Because with the right data you can massively improve your return on purchasing goods and services.

High quality, cleansed data helps to drive a more strategic view of procurement. It enables teams to make informed decisions, earlier in the procurement lifecycle. If you do not have it, then you can certainly still view total spend, but in a very inadequate way that does not allow you to understand the size of the cost saving opportunities that exist. These opportunities may include variance in pricing, contract terms, consolidation, payment discounts or duration.

You need cleansed, granular data to be able to provide good insights to make the right purchasing decisions. You simply cannot do this efficiently without having access to a platform that provides this quality of data in a timely manner.

Often, a big challenge in an organisation sits in the realms of data. Without good-quality data cleansing and data classification you will never have genuine spend visibility.

When a company has good spend visibility they get timely, accurate, complete and detailed data that offers invaluable intelligence and insight into their spending patterns, compliance and performance. These insights help them identify savings opportunities, drive compliance and develop purchasing strategies which reduce cost.

Originally published on Procurious

Leave a comment


 

 

Career opportunites

Procurement Manager

  • >500 000 Gauteng Permanent Procurement Management
Job purpose We are looking for a Procurement

Fresh Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Jnr - Mid Level), Supply Chain Planning, Based

Groceries Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Mid Level) Supply Chain Planning, Based at Kenilworth,

Category Implementation Manager

  • >500 000 Gauteng Permanent Projects / Category Management Supply Chain
As an Executive Search and Career Consultant specializing

Head of Procurement

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Regional Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Director

  • >500 000 KwaZulu Natal Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Specialist

  • >500 000 Buyer Gauteng Permanent Procurement Officer / Specialist
As an Executive Search and Career Consultant specializing

Senior Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing Supply Chain
As an Executive Search and Career Consultant specializing

Indirect Sourcing Programme Manager

  • >500 000 Contract Projects / Category Management Strategic Sourcing Western Cape
As an Executive Search and Career Consultant specializing

Deputy Chief Commercial Officer

  • >500 000 Contract Gauteng Procurement Management Supplier / Business Development
As an Executive Search and Career Consultant specializing

GROUP PROCUREMENT MANAGER

  • Gauteng Permanent Procurement Management Supplier / Business Development
Operating out of Johannesburg, this is a key

Tutor and Coordinator

  • Gauteng Operations, Planning & Inventory Permanent Procurement Management Supplier / Business Development
Purpose of the job: To plan, coach, advise

Commodity Manager

  • <500 000 Commodities Gauteng Procurement Management
Are you a Commodity Manager looking for the

Supply Chain Professional

  • <500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Supply Planning

  • <500 000 Gauteng Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Procurement Consultant
Are you an Industrial Engineer looking to make

Logistics Manager

  • >500 000 Gauteng Logistics & Warehousing Supply Chain
Seeking vibrant industry specific individuals seeking new opportunities

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for an Operations Manager to take into

Supply Chain Systems Administrator

  • >500 000 Gauteng Procurement Management Strategic Sourcing Supply Chain
One of South Africa's leading, mining companies is