Spend analysis: Why procurement people must seek your help to lower costs

Have your purchasing people been coming to you to help them get a better handle on where, how and why money is spent on material and services? Have they been seeking your advice on how to be sure purchase decisions are being made to minimize lifecycle cost, not just initial price? If not, maybe they're not doing their job.

According to a recent study by SAP and the Procurement Leaders Network, organizations are enacting stricter guidelines regarding cost management. Accomplishing their goals means procurement must not only improve interactions with suppliers, it must also sell within the organization to expand its influence
to gain oversight of an increasing number of spend categories.

At the same time, mitigating supplier risk is a topmost concern, with many organizations renegotiating contracts, enacting supplier performance management programs, consolidating their supplier base, and even aiding at-risk suppliers to minimize supply chain disruptions. Successful companies are partnering with key suppliers to enact joint planning programs that find a common ground without squeezing the supplier.

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