Procurement process visibility refers to the complete transparency into the internal operations and expenditures of an organization. Organizations can better understand where their money is going and why, as well as how to save costs, by segmenting spend and suppliers by key categories.
Visibility is a critical characteristic that provides a more in-depth analyses of spending, contracts, and sources. Increased visibility means greater information sharing, faster communication, and better, more informed decisions for the entire organization.
Benefits of Procurement Process Visibility
- Reduce the amount of time you spend keeping track of contract status
Take, for example, contract management’s communication challenges. Stakeholders in the contracting process often have restricted access to contract specifics, especially if they aren’t actively involved in the contract. All stakeholders may track the contract’s progress as it progresses through the workflow with the correct method and tools. As a result, the contract manager will need to spend less time presenting details to stakeholders, who will be much more informed.
- A better understanding of budgets
Some employees may be unsure of what budget levels are available to pay for non-PO invoices when vendors submit invoices. Employees are empowered to change the payment process when budgets are insufficient by having a clear view of the budgets available to pay for services. This benefits the quarterly budgeting process and empowers all staff.
- Make better-informed decisions quicker
Having information at our fingertips and reducing guesswork is what we all desire. Buyers must be able to generate enhanced macro-level, award summaries, and comparison reports while managing the bid process. The decision-making process is accelerated when this process is accelerated. While spend visibility is still a top priority for procurement managers, visibility across the procurement workflow (both upstream and downstream) may be extremely beneficial to the entire business.
Strategies to Achieve Procurement Process Visibility
With the appropriate strategy, you may gain complete visibility into your procurement operations. If you follow the strategies given below, you’ll be well on your way to properly managing the entire procurement process.
- Ascertain that your human resources are capable of doing the job
The first step is to ensure that our human resources are capable of handling the situation. Strong negotiating skills, relationship management, and the ability to drive change are just a few of the mission-critical skill sets your team already possesses.
What about data analytics, statistics, or the technical abilities required to interface with the most up-to-date data management and visualization tool sets? Not all procurement teams have these abilities, so bringing in outside personnel may be necessary to close this gap.
- Rethink your SOP
Even the best resources will be hampered if they must adhere to outdated, inefficient, or bureaucratic Standard Operating Procedures (SOP). If our procedures aren’t constructed with visibility in mind from the start, they’ll most certainly become a problem down the road.
The involvement and work of various team members, stakeholders, and eventual product/service customers are required in certain intricate procedures constructed around this mainstay of procurement activity. Despite the enormity of the task, everyone’s acts are compartmentalized, with only their signatures visible. The SOP must be re-evaluated.
- Make sure that everything is recorded in a central location
You’d be much better off developing a procurement system that requires all members of the team to save important data in one centralized spot than going around your office attempting to find records. That way, you’ll know exactly where to look for precise information anytime you need it, providing you a greater understanding of how money moves.
- Switch to a paperless procurement method
If you’ve been managing your procurement needs on paper for a long time, now is the time to move to an electronic procurement system that makes monitoring purchases, approvals, accompanying papers, and other relevant data a breeze.
Instead of manually searching down purchase orders, invoices, and inventory, you can now use your new system to locate that information in seconds. This streamlines the entire procurement process, allowing you to focus on other critical aspects of your business.
- Remove the lengthy approval process for ordinary purchases
A typical order for new office supplies does not require your CEO’s approval. If your company makes a lot of recurrent purchases, you might want to change the approval procedure so that executives don’t have to sign off on every order.
Although huge expenses should undoubtedly be processed through them, normal and recurring lesser ones serve as speed bumps that can significantly slow down businesses. Consider creating a database of specified vendors and items from which a small group of employees can order directly, with fewer or no approvals required in some circumstances. In addition, you can set spending limitations on preventing staff from amassing large bills, which will help you cut down on rogue spending.
- Make sure your team is well-prepared
You must train every member of your procurement team to ensure that they are up to date on the newest tools and technology and possess the essential skills to succeed in their positions. Make training investments on a regular basis as technology and industries change. Your team will be much more productive and effective if you have the necessary tools and know-how to use them.
- Keep your staff informed by communicating properly and regularly
Keeping your staff updated and encouraging input on methods to improve or change the efficiency of the process constantly is one of the easiest ways to acquire procurement visibility. You’ll gain even more insight into your spending if you include every member of your procurement team in the process and keep lines of communication open.
Enhanced communication empowers both managers and employees to take greater ownership of expenditure control in a collaborative manner. Accountability grows when more members of the procurement team communicate with one another.
- Vendor management
You rely on vendors and suppliers for the products and services you require to grow your business. However, just because you’re the one writing the checks doesn’t mean you have to agree to every vendor’s terms. You may improve your procurement process while lowering risks by prioritizing vendor management. If a supplier has been late with a number of shipments, for example, you should generally look for another source. The stronger your vendor relationships are, the more likely you’ll be able to negotiate better deals—and eventually increase company profits.
Better visibility is essential for strategic sourcing because it illuminates all of the hidden spend that your teams would be eager to address if only they were aware of it. In addition to this, it aids in the reduction of soft expenses by streamlining our process and eliminating lost time and energy spent on maintaining manual, opaque procedures.
It is a lot easier to describe than it is to carry out the actions outlined above. The road to better visibility is long and winding, and it involves more than simply process changes — it necessitates a shift in organizational attitude from everyone involved in the procurement process, as well as those who support or rely on it.
If you want to increase your brand’s visibility, Procurement Partners can help you achieve it!