Having one’s procurement house in order is a very critical aspect of ensuring smooth functioning of an organization in today’s ever-evolving and volatile business environment. Given the global nature of businesses today coupled with increasing regulations to keep up with, it is paramount that procurement has firm control over its policies & processes to avoid any compliance leakages which could have negative ramifications for the organization.
In Part 1 of this blog piece, I would like to cover the metrics that need to be on the watch list for procurement compliance. Part 2 of the series will focus on the benchmarks for these key metrics as well as ways to move the metrics for better procurement compliance.
Having more visibility into the organization spend as well as having control over this spend can go a long way in helping procurement get a grip on the potential risks that could be emanating due to the lack of visibility & control. It is for this reason that Spend Under Management is a crucial metric for any procurement organization. Having more SUM also is a gateway to driving more value from procurement activities be it delivering on savings or for that matter being the customer of choice for the suppliers.
Contracting most often or not plays a critical aspect in business operation & continuity. Contracts are an essential means for an organization to meet its goal of spend protection & cost reduction. Contract compliance is a crucial metric for procurement to track adherence to payment terms, realization of negotiated savings and most important of all, mitigation of risks emanating from transactions outside of negotiated contracts.
According to The Hackett Group, operational excellence requires quality across different transactional touchpoints to drive end-to-end compliance with policies & procedures. Some of the critical metrics one can attribute to this would be –
Stay tuned to access Part 2 of the blog which will cover the benchmarks on the above metrics & how you can get a move on for better procurement compliance.
Register for our upcoming Demo Connect called ‘Keeping the Procurement House in Order – A Sneak Peek into How Zycus Can Help Drive Compliance & Reduce Risk’ on 5th June. Zycus Solutions Consultant Richard Roberts will give an exhaustive demonstration of Zycus Genesys, our solution for mid-market companies who are at the early stages of procurement transformation.