What are You Doing to Control Spend?

What are You Doing to Control Spend?

Controlling spend is normally a top priority of procurement executives.

I routinely ask this question: “What percent of spend flows through your systems?”

Under 50% is a common response.

In studies that I have read, the best companies in the world have about 65% of spend under management.

I believe the primary reasons fall into two categories:

  • Systems in place
  • Resistance to change

Most procurement professionals that ask for my advice do so because the systems they have in place aren’t helping them drive change.

A senior executive recently told me that they need to execute many more RFPs and auctions and the current system is cumbersome and unwieldy.

To analyze bids, it is far easier to rekey the information into Excel than to use the analysis reporting tools in the system.

Another executive shared this in confidence: “I believe that many buyers in my organization will continue to do things the same way even if we put in a best-in-breed solution.”

I understand these frustrations.

Here are the key capabilities I want in any new system:

  • Intuitive – It should allow me to get working without a lot of training
  • Flexible – there should be more than one way to accomplish a task
  • Powerful – as I get smarter, it will allow me to analyze complex projects quickly
  • Adaptable – I should be able to eliminate steps for routine projects
  • Reusable – if I have run the same or a similar project, I want to be able to copy some or all of it

One last thing and this is critical – I want to be able to edit any part of an event on the fly at the beginning, during the event or at the last moment.

In summary, the system should make my life easier and help me to be more productive.

So, if I find a system that appears to have all these capabilities, why might I resist changing?

Have you ever tried a new restaurant that friends raved about only to find that your favorite place is simply better? This happened to my wife and I last week. The new place was good – just not great.

Trying a new restaurant for dinner is not the same risk as choosing a new procurement tool but I think you understand my point.

If you have been burned in the past by a great looking product or a persuasive sales presentation, you understand the fear of change.

Too often a system is easy to buy and difficult to implement or impossible to maintain.

The most effective tools allow you to manage small events and massive events with similar effort.

There are solutions available that do live up to the hype.

I would offer one caution – just because friends in other companies are excited about a solution, that doesn’t mean it will be the best fit for your company.

As your team gains momentum, they will most likely want more horsepower.

A tool that can handle routine projects easily may fall short with complex projects or complex analysis.

There will always be resistance to change.

The most beautiful result is when users find success and tell their friends and colleagues in the company.

This creates the momentum that drives real change.

My dad was a machinist and could make anything. He had a simple approach to most things – the right tools, the right materials and patience to deal with unexpected challenges.

If you are committed to driving change and the systems you currently have are holding you back – perhaps it is time to bring in a professional to help your organization identify the right solution.

Ask better questions, make changes and 2019 will be your best year ever.

Action Step: If you are uncertain where to start the process of change, a procurement professional like myself can provide guidance and expertise to help your organization achieve the results you want.

If you want to go explore this topic in greater detail, please contact me. I invite you to request 30-minute discovery conversation. In my experience the next step will be apparent at the end of the call. I never assume that what I have to offer will be right for everyone, so don’t expect a sales pitch. You can reach me at (973) 718-7071 x875. The call will be forwarded to my mobile phone if I am not in my office which is pretty likely.

If you would like to know more ways to reduce costs without changing the way you do business, simply give me a call or send me an email with your contact information and the best time to reach you.

You Won’t Drift to Success©

Commit to taking the next step.

Until Next Time, I Wish You Great Success in Your Business and in Your Life

Mike Jeffries