What is the inspiration for seeking to improve spend management influence? What is the driving force behind trying to impact the spend management function?
Without a comprehensive strategy for how procurement will advance the spend management program, the team will have a steep hill to climb before achieving new value.
Many procurement organizations, invest most of their time and focus on managing suppliers and ensuring the lines of business are supported.
This is a good start for less mature organizations, but leaves a lot to be desired for a more mature procurement function.
As a procurement organization begins its journey, no matter how mature the business function is, it must take a deeper focus on the team.
The journey is best endured with a team that is all pulling in the same direction.
Often, when procurement teams focus on spend management, they prioritize low-hanging fruit or top spend categories.
Certainly, tackling either of those will produce some results. However, in order to truly optimize spend the mature organization take a more holistic approach to this segment of the journey.
Research shows that an organization’s procurement function frequently lacks the type of high-quality, sourcing-ready data. Without it, it is impossible to identify and realize cost savings. The first step is to do a deep data cleanse and spend analysis.
Add the following to strengthen your spend management strategy:
An effective spend management plan includes a deep focus on the data, the opportunities and the plan. When combined with the right team and effective navigation, a successful journey will result.