Savings Now

April 18th, 2017

Acting quickly to realize savings faster

 

Today’s post is by Dave Wenig, Director of Sales at SafeSourcing Inc.

Many post have been written about the reasons for implementing eProcurement into your purchasing process. Today, we’ll assume that this decision has already been made. The question now is how do you start realizing savings? When will we see the results?

The reality is that you should be able to see results within the current quarter. Whether or not you do depends on several factors, but is completely within your control.

First, have you targeted categories that range in complexity from simple to complex? The quick win categories are often fairly simple and can be achieved while you continue to work through the details necessary for more complex categories. Make sure that you constantly achieve savings by avoiding the pitfall of only selecting complex categories, especially as you begin sourcing with eProcurement. The excitement from success is contagious

Second, you’ll need to be sure that the entire team understands the eProcurement process. The most successful eProcurement initiatives are driven at the C level. From there, everyone involved in the purchase process should know what is involved in the process and how the award of business will be made. This will go a long want to prevent rogue spending and negotiations with vendors outside of the eProcurement process; both of which will derail your initiative.

Third, there comes a time to simply take action. Avoiding analysis paralysis is necessary to achieve savings. It’s understandable that you wonder if making optimization changes to your existing program will drive better savings or to seek out higher volumes in search of better savings. However, the time required for these considerations comes at a cost as you continue to purchase at your existing price. The alternative? Decide to reduce your current costs now and plan to optimize process or collaborate and renegotiate again only once you are ready. This allows you to buy at a much better cost while you work on your longer term strategies within that category.

There are other considerations as well, but the fact is that the success of your eProcurement program depends on your organization’s commitment to identifying and achieving savings at every opportunity.

For more information, please contact SafeSourcing.

We look forward to your comments

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