When any business starts it is imperative that it acquires assets. It begins with laptops, office space, furniture and so on. This analogy is much simpler than the on ground reality, which is – businesses have been functioning for many years and they have over time acquired multiple assets (hundreds and thousands) across branches across the globe. What does it all lead to?
A pilot sets the air carrier on auto pilot reaching optimal conditions after take-off and setting the trajectory and coordinates for its journey. He monitors the flight without constant hands-on human control. Similarly, has the time come to automate the age old procurement systems in your organization? Across industries, organizations are faced with the fact that procurement can be a tedious process.
Procurement has traditionally focused spend management efforts on their firm’s largest suppliers, the vital 20%. These efforts have produced the expected returns but years of cost cutting with large suppliers have squeezed out most of the savings to be gained. Pete Loughlin wrote in Purchasing Insight that ignoring tail spend is potentially leaving huge amounts of money on the table.
Each large organization prefers centralizing procurement and payments. Yet, most are not able to do so. Procurement teams and Accounts Payable (A/P) teams struggle to streamline and centralize. Let’s explore the key reasons for this.