This is where the procurement function, those folks responsible for the safe-keeping of an organization’s spend and who are trained at buying “risk”, whether it’s via a product or a service, can help their businesses make market intelligent decisions.
For both procurement and finance, this means a few key points:
The days of simply identifying spend and its uses are over. Visibility of accurate, quality data is becoming more and more important. CPOs and CFOs are now responsible for having much deeper knowledge of suppliers and the marketplace, not only locally but globally. With the complex and costly needs of a business, poor visibility into accurate spend data can results in lost opportunities.
Understanding your company’s spend often results in procurement and finance having stronger capabilities to manage their supplier relationships, costs, compliance and risk. From taking control of insights offered by higher visibility, procurement and finance are better equipped to take control and provide full value on products and services for their business.
When procurement and finance have the capability to understand and learn from historical spend data, it prepares them to better leverage their supplier relationships and quickly identify opportunities in the rapidly changing marketplace. Ultimately, this gives a company a competitive advantage and stronger buying power.
Through better analytics and monitoring systems, procurement and finance are able to directly prevent some of this wasteful spending ahead of the year end. By putting relevant and timely data into the hands of the budget holders, and empowering procurement to support and assist the careful management of risk, then behavior will change.
In order to accomplish this visibility, data must be readily accessible, accurate and shared across the enterprise in order to facilitate collaboration and decision making. For many, just getting a grip of data is the hardest part of the entire process.