The 2010 Winter Olympics begin tonight with more than 2,600 athletes from 83 countries traveling to Vancouver to compete in 86 events over the next 17 days. Many Olympians will have dedicated the majority of their lives to participate in an event that amazingly will conclude in minutes, if not seconds. For these Olympians, it is said, that “the most important thing is not to win but to take part!”
For CPOs and other leaders across the source-to-settle process, on the other hand, there are no commendations for taking part. Woody Allen was wrong, 80% of the battle is not just showing up. An ability to compete with the Best-in-Class for procurement gold takes practice, determination, and focus. Individuals and organizations must strive for greatness if they are to achieve it, or even begin to approach it. One game-changing strategy is to automate and link the entire source-to-settle process. If technology budgets today are not enough to get you there, start by manually, but holistically, linking your processes together (sidebar: I believe that anytime you start adjusting your processes, you should invest significant effort trying to simplify them). The majority of enterprises today fail to automate and link their source-to-settle processes in a holistic fashion. Here are a few examples of what these enterprises experience, on average, by failing to close these gaps:
- Sourcing teams that fail to link spend analysis with their sourcing processes lose an incremental 39% in savings
- Process gaps between the sourcing decision (i.e. contract award) and the final contract execution contributes to the savings leakage or losses that occur here and average between 14 and 24 % of total identified savings
- The average enterprise loses 22% of every dollar that is spent off-contract
- Enterprises without eProcurement pay twice as much for each PO, have 65% higher levels of maverick spend
- Non-PO invoices cost an average of 20%-30% more to process, while those failing to deploy ePayables solutions across the A/P process can spend up to 83% more processing invoices
Most organizations are not there yet. But each now can make this a goal to advance swifter, higher, and stronger and one day, ascend to the procurement medal stand. If you’re going to train and actually play the game, you may as well give yourself the best chance to win.
Have fun, link these processes, and let the games begin!