2020 Procurement and Spend Management To Do List for Businesses
Our 2020 To Do list:
Talk to Colleagues, Departments, Peers and the Person on the Next Desk
The roll of procurement or purchasing, within a company or charity, supports and achieves value for the organisation by managing risk and looking for opportunities between your organisation and suppliers. For this to be as successful as possible and for the function to work properly, you need to engage with human beings, talk to them, learn from them and out what their processes are, including what they're happy with/ most vexed with.
Start at Zero With Your Budget
When it comes to tracking all business expenses should you simply roll over the budget from the previous year? New technology, new processes, innovative ideas and services are constantly improving and evolving so why wouldn't you look to justify and rationalise your cost base each year and start your budget at zero. The team members responsible for budget planning analyse each area of spend, along with every function and a decision is made whether or not to continue with it or whether to get rid along with the office Christmas tree.
Procurement, and all that that term entails, must be aligned with the organisation's objectives, goals and culture. Having a comprehensive procurement and spend management plan is fundamental to achieving both your businesses core aims and values as well as achieving financial goals. This philosophy is a great start but it's vital that this is aligned with your short and long-term business goals. If you don't have a robust purchasing and spend management strategy in place, it may result in you having to scale back or re-write your business strategy somewhere down the line.
Rate Increase Just Because the Month Starts with "JAN"
Speak with new suppliers. Not everyone puts their rates/ pricing up for services such as Courier Services or Business Supplies and Services just because we're at the start of a new year.
Why Not Ask Sharon to Give Your Thoughts a Quick Read?
Get someone independent of both the procurement team and finance team to read through your purchasing and procurement thoughts/ strategy. They may be able to look at it with the eyes of a supplier. They will often see conflicts or inconsistencies, which you may have missed. This will only result in suppliers matching what they have to the part where you mention it. Gain clarity of exactly what you need and you'll get it.
A Bit More on Clarity, Clarification and Clearing Up
If you get, "can I just clarify" questions from suppliers, make sure it's because there could be a bit of confusion or misunderstanding. Think about your answers in relation to what you asked for in the first place. We've seen suppliers, ask clarification type questions not because they are confused or puzzled but because they want to change your requirements to something that suits them better.
Finally, Consider fixed and variable expenses
Not all of your cost base will be easy to budget for and remain fixed for a full 12 months of happy planning. But there may be further opportunities here that shouldn't be ignored. Think about the costs that are the same throughout the year and those items on your purchase ledger that may increase or decrease over the course of 12 months. Do you have seasonal or peak operational times/ weeks/ months that'll have a big impact on your purchasing numbers? Could new rates/ pricing be negotiated to specifically cover that period? Fixed expenses allow you some great budget certainty to help you budget for the 12 months ahead. But variable/ non-fixed expenses may provide opportunities that shouldn't be ignored.
"Having a comprehensive procurement and spend management plan is fundamental to achieving both your businesses core aims and values as well as achieving financial goals............................"