Financial practitioners can deliver a best practice best value approach
e-procurement: Financial practitioners can deliver a best practice best value approach according to e-procurement specialist, Peter Robbins.
Spend visibility has never been higher up the agenda. But controlling the overhead in any organisation, never mind the public sector, can be viewed as the devil's challenge.
One area where technological advancements are strengthening financial practitioners' 360 degree view of their organisation's spend is e-procurement. This is even more valuable when you consider the dynamic purchasing environment of the IT marketplace. Technology can dispel the black art element of purchasing and provide powerful forecasting and planning functionality as well as more efficient purchasing within the organisation. In a nutshell, saving time and money to help stretch the reach of any IT budget.
The 'Efficiency Review' has undoubtedly established this agenda for change within procurement and it is telling that proactive organisations like the Institute of Chartered Accountants in England & Wales are setting up Public Sector specific web sites and forums to debate topics like IT and procurement.
If the public sector is to achieve the savings demanded by the current climate of transformational government, financial controllers must embrace new ways of maximising spend visibility to increase the reach of their budgets. That is not to say they need to learn how to become buyers rather it is about using technology that empowers their organisation with the tools of procurement professionals.
IT managers should relish the opportunity to work more closely with financial directors as they switch on to best practice best value approaches for bottom line savings. And it is aggregation technology that will provide the control required by the financial division, which will also release time the IT team can better spend managing IT rather than undertaking procurement chores.
With access to price policing tools IT managers can build their own product lists that are daily updated with trade cost and stock information. This provides market knowledge that can be used to negotiate with a preferred supplier from a position of strength. For a financial controller the solution provides reassurance that best value is being achieved every purchase and often sees final purchase sign-off being devolved to the IT team as a better way of working. The technology acts as the catalyst for this positive change.
A further step would be to introduce an aggregation procurement hub, which gives buyers access to purchase from a daily updated catalogue of over 100,000 products listed by best price and availability from 1200 suppliers. As the actual purchase itself is fully automated, organisations are finding this type of technology is saving at least a day a week in time. And as invoicing is also electronic, the whole process is faster, which ultimately improves cash flow.
By implementing new user friendly automated processes that empower end users within a controlled purchasing environment, organisations can achieve a win win situation. More efficient buying, planning and forecasting, stronger links with suppliers and even policing of preferred supplier, framework or cost plus agreements.
As the largest in-direct procurement spend within an organisation, the dynamic IT marketplace represents a huge opportunity to make savings through best practice approaches. But procurement often gets less attention than it perhaps should. The procurement department is seen as the department which keeps organisations legally compliant and out of the courts, answering auditors' awkward questions about value for money, but not much else.
The climate is changing and not before time. That is not to say that financial controllers need to be intrusive and undermine their colleagues in IT or procurement but understand that with business process re-engineering, the implementation of a user friendly technology can actually save time and money to directly impact on the bottom line. Such technology will provide demonstrable ROI immediately.
Furthermore, with the dawn of the Freedom of Information Act, financial controllers now have their work cut out when it comes to providing transparency of agreements and tracking of myriad paper trails within purchasing circles. Modern aggregation technology takes a simple approach that ensures all Request For Quotations (RFQs) are recorded and full audit trails can be delivered at the click of a button.
So, the latest technology is not just a tool for buyers to get a better deal. Financial practitioners can use it as a mechanism for greater purchasing visibility, planning and future proofing.
The end result is that technology is bringing finance, procurement and IT departments closer for measurable, sustainable, long term savings through a best practice approach.
MD, Probrand Ltd