Given the dramatic financial impact driven by these types of advanced tools and the potential positive impact on earnings these initiatives should have the visibility and oversight of the most corporate senior executives.
This is more true today than it ever has been, yet does not!
The role of e- procurement solutions continues to become more strategic each year. Driving cost out of goods and services is one of the most important above the line initiatives any company can undertake. But make sure you don’t forget the expense or indirect spend area.
In order to successfully implement an enterprise wide e-procurement initiative, executive management must provide sponsorship and visibly promote these projects within their organizations. Executive sponsorship is required by the Chief Executive Officer, Chief Financial Officer, Chief Procurement Officer or Chief Logistics Officer. The potential impact to earnings regardless of Industry is so significant with a properly deployed e-procurement program that officer level executives require visibility based on the potential impact to stockholders and stakeholders alike. In fact Sarbanes-Oxley section 404 requires the following of companies:
1. Demonstrate reasonable & consistent governance & compliance monitoring.
2. Assure proper use of tools that have been placed into practice.
3. Employ proper reporting & management oversight.
Implementing e-procurement solutions has the potential to offer significant earnings changes.
Once executive management has sponsored these initiatives, some form of accountability must be implemented to ensure maximum participation in order fully realize organization wide savings opportunities. Scorecards may be a good way to begin. Scorecards report on KPI’s that indicate a teams or a company’s effectiveness. Examples might be awarded savings vs. low quote savings by team and by individual. This could lead to understanding lost savings opportunities or relationship management issues that provide risk.
A company’s successful transition to e-procurement requires a transition from a cumbersome paper RFX processes to one that focuses on using the speed and efficiency of an electronic forum. Successful change management professionals focused on sustainability realize that this shift must be a combination of the use of not only the latest software advances, but also reengineering of internal processes in order to drive sustainable results.
If you’d like to learn more about how SafeSourcing can help you improve your financial results, please contact a SafeSourcing customer services representative.
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