Internally Marketing, Measuring and Demonstrating the Value Procurement Brings To Your Organization
Source One helps procurement teams market the value they provide to their organizations and can help procurement teams drive sustainable results that are recognized by both finance and their business leaders…
Let’s face it; Procurement doesn’t always get the credit it deserves. Of course, it’s not just about getting credit; it’s about showing the entire organization the value that Procurement can add to any supply relationship. Procurement can demonstrate to other departments that collaboration with procurement on strategic decision making on any type of spending will provide move value for each dollar spent. Procurement can have the second largest impact to the bottom line aside from sales. Procurement’s involvement in sourcing projects should not be seen as adding process or complexity, but should be viewed as a valuable resource in helping budgets go further.
But, we all know, it’s just not that easy. We find that finance departments often measure procurement’s success strictly on its impact on a total budget amount year to year. Finance departments often don’t see the savings their purchasing and procurement departments have accrued due to unaccounted purchase volume increases or a fundamental misunderstanding of cost drivers. Other departments aren’t aware of procurement’s expertise and continue to source and purchase items themselves, thinking that procurement will just delay their purchases. Yet creating the proper reports to show value and communicating those results to the executive team is just something many procurement teams do not have the resources to handle. Source One can help.
Source One provides thorough analyses and objective reporting metrics during the sourcing process, those same metrics are used to measure results and monitor compliance during implementation and for future purchases. Our reporting not only helps to market procurement’s value within the organization, but also ensures that the predicted cost savings targets are achieved. We are an advocate for procurement personnel and improve inter-departmental relationships and the view from the “Ivcory Tower’ for our clients.
We are an advocate for procurement, our services:
- Improve interdepartmental relationships
- Improve the view and perception of procurement by finance
- Increase the awareness of Procurement’s value to the organization
- Improve the view and perception of procurement by the “Ivory Tower”
- Help to facilitate organization change and internal procurement ideas that have often gone unnoticed prior to our involvement
Cost Savings Reporting and Metrics:
Part of our process includes defining cost savings with all stakeholders, creating objective measurement tools to properly reflect savings, and communicating with internal departments to customize reports to meet the needs of end users. Report types include:
- Granular Reports – Tie back to the cost center of the product purchased.
- Summary Reports – Provide an overall summary of procurement’s impact.
- Compliance Reports – Give an indication of who is purchasing from the correct supplier and who is not.
- Lost Savings Reports – Show saving opportunity lost in terms of dollars.
- Budget and Volume Forecast Reports
Tracking Savings and Measuring Goals is Critical
Tracking savings is critical to reaching forecasted goals and reporting those savings is imperative to marketing procurement’s value. Third party sourcing companies, such as Source One, can serve as advocates for procurement and can improve relationships between procurement personnel and top-level executives, end-users, and finance departments. Just a few years ago it was taboo for a procurement team to even consider hiring a strategic sourcing consultant. Not anymore. Now, forward thinking companies and market leaders all have procurement teams that are actively looking for the right sourcing and cost reduction partners.
Cost Savings, Recovery and Avoidance
Cost Recovery and Audit Services
Our procurement auditing services can help you with cost recovery, cost containment, driving compliance, and duplicate payment reviews. In-depth auditing is a daunting task for an already over-burdened procurement and finance teams. We not only evaluate and find lost savings opportunities; we actively help to recover those fees and ensure that they don’t happen again through continual monitoring.
Invoice and Cost Auditing
Huge Savings Potential
Source One’s extensive strategic sourcing experience in hundreds of spend categories has resulted in an average 18% savings across all commodities. Our proven strategic sourcing methods have saved companies millions of dollars while improving their procurement operations and internal processes.
Sample Savings Achieved through Strategic Sourcing