The XXII Winter Games are still going strong in Sochi, Russia and will continue through this Sunday. I must admit that I have not watched as much as I would have liked (largely due to this upcoming research report).
With a bizarre tagline of “Hot. Cool. Yours.,” balmy temperatures in the 60’s, and its penchant for side-by-side toilets (aka “a loo with a view”), this Winter Games has confounded many a fan. Nonetheless, approximately 2,800 athletes from 88 countries traveled to Russia to compete in 98 events over 17 days. Many Olympians will have dedicated the majority of their young lives to participate in an event that amazingly will take mere minutes to complete. For these Olympians, it is said, that “the most important thing is not to win but to take part!”
For Chief Procurement Officers and other leaders across the source-to-settle process, on the other hand, there are no commendations for just 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 save significantly less on the average sourcing project
- Process gaps between the sourcing decision (i.e. contract award) and the final contract execution contributes to the savings leakage and a large gap between what procurement and finance count as savings
- The average enterprise pays almost 20 cents more for every dollar that is spent off-contract
- Enterprises without eProcurement pay twice as much for each PO and they have extraordinarily higher levels of maverick spend
- Non-PO invoices more to process, and those failing to deploy ePayables solutions across the A/P process can spend up to 90% more processing their invoices
While most procurement organizations are still in training mode, now is the time to set the goal to advance swifter, higher, and stronger across your processes and ascend to the procurement medal stand. If you’re going to play the procurement game, you may as well give yourself the best chance to win.
