In a recent article in Forbes “Follow the Money: Five Ways to Improve Your Bottom Line By Taking a Closer Look at Spending Habits.” Jason Stern outlined the key areas to focus on to improve profitability through Spend Management. Building on this Simfoni has solutions that can automate these key areas without the heavy cost and long implementation of traditional Procure to Pay (P2P) solutions. Simfoni’s Spend Automation is uniquely qualified to meet the spend management challenges as it is a turnkey solution that doesn’t require additional resources, investment in technology and includes pre-negotiated savings.
Based on the five focus area’s I will align the Simfoni approach to quickly and successfully manage indirect spend.
See Spend Differently
Beyond saving money, tightening up your corporate spending habits can help to improve your business in many ways. Here are just a few ways to go about it:
1. Utilize data and analytics. Consolidate all of your spending data in one place so that you can get a clearer picture of what’s happening and identify opportunities for improvement.
Simfoni Spend Analytics is at the core to an effective Spend Management program, within weeks Simfoni can build a data driven strategy to focusing on the highest value and low hanging fruit for the biggest impact. Without doing Spend Analytics its impossible to have a clear picture and quantify the potential.
2. Employ a hybrid approach. Centralize your indirect purchasing but retain the flexibility for business units to handle direct purchasing. By separating the direct and indirect, you can realize cost savings and retain more control over indirect expenses without creating supply chain delays and disruption.
Focus your limited internal resources on your strategic supply chain and let Simfoni address the indirect spend with a combination of highly trained people and technology. You get all the value of sophisticated procurement without the overhead.
Read More:- What is Procure to Pay – A Guide to Procure to Pay (P2P) Process
3. Automate your processes. Digitizing procurement can create efficiencies across your entire organization, helping to eliminate unnecessary complexity and enabling your business to become faster and more agile — two very necessary traits to cultivate in today’s competitive business landscape.
Having the right technology is the key to automation. It needs to be simple, easy to use, and straightforward. Don’t try to automate the current manual process as that will lead to an over-engineered solution. Start with the data, get that organized and cleansed. Use the data to prioritize what’s best for your organization by value and take a modular compostable approach to which modules will have the greatest impact.
4. Consolidate your suppliers. Focus your efforts and find suppliers that offer the best value and are easily accessible for buyers throughout the organization.
In the absence of a centralized procurement function, organizations have added suppliers based on business units or line of business drivers. As a result, your company can’t take advantage of efficiencies created from demand aggregation, automated billing, or even better payment terms. By focusing on consolidation you’re able to identify the right vendor, negotiate the correct service levels, and have a strategic partnership that only benefits your business further.
Read More:- What is Procurement and How To Optimize Processes, Performance, and Technology?
5. See the bigger picture. With the growing interest in corporate social responsibility, you can assume that the world is watching how you run your business. The environmental consequences of sourcing goods from the other side of the world are numerous. Global supply chains are not only susceptible to macro factors such as environmental disasters, trade tariffs, and regulatory change (not to mention modern slavery risks), but they also create enormous management complexity.
We no longer live in a siloed world where social responsibility is an afterthought. Globalization doesn’t just come from sourcing cheaper resources it also means that your corporate values have to be extended into the Supply Chain. It is not enough to measure and report on Corporate Social Responsibility (CSR) you must be looking for ways to actively improve your supply chains Diversity and Inclusion, Social and Environmental Impact. By leveraging Spend Analytics best in class companies are able to identify areas where they can improve the effectiveness of their CSR initiatives and more effectively meet the goals. These actional insights are not done at the cost of saving or reduced quality as these are easily identified within your existing spend data.