Anyone who has come into contact with spend analytics knows they can provide clear information on spending activity. While that can be useful, the reason companies should care about these types of analytics is the information they can offer goes beyond just spending. Specifically, it can help a company increase productivity. It can also boost savings by making it possible to streamline existing purchase-to-pay practices.
How exactly can spend analytics help your business increase savings and streamline its practices? The answer is by identifying some specific areas that can be improved, which are:
Contracts are crucial for enterprises. Without them, there wouldn’t be a way to cement the relationships that enterprises have with their suppliers. Given that suppliers are the source of goods and services that enterprises require to remain functional, it’s easy to understand why contracts are something that need to be taken seriously. Although contracts serve a very important function for enterprises, that doesn’t mean they’re always handled properly.
In recent years, purchasing departments have begun to play a more significant role within many organizations. A big driver of this shift has been the realization by companies of all sizes that purchasing can actually provide a competitive advantage. As a result of this increased significance, it’s important for companies to understand how to properly measure purchasing performance.
The hotel industry has gone through some major changes in recent years. Not only has it had to adapt to the Internet, but it has also had to find ways to stay competitive in an environment with increasing pressure from sources other than traditional hotels.
Even though the changing landscape has presented very real challenges for hotels across the entire industry, the ones that have continued to thrive share some key characteristics. Specifically, the hotels that keep making progress are those that have embraced what technology can do for them.
Although it would be easy to only view technology in a negative light as a result of the additional competition it has created, savvy hotels have taken a different approach. Instead of trying to resist the major ripples created by technology, they’ve found the best ways to harness the technology that’s available.
Technology Can Play a Key Role in Procurement Growth and Efficiency
Since technology is having a major impact across most industries, those in procurement should take a cue from the hotel industry and take advantage of what’s available. Specifically, purchasing managers can gain a lot from using purchase order software. With help from purchasing software, procurement professionals will no longer need to stress over things like enforcing budget thresholds.
Instead, they’ll have the tools that are needed to make this process a breeze. The reality is that’s just one of numerous examples of the way that the right software can help optimize procurement activities. While this type of software is very powerful, what makes it especially compelling is that it can be used without the need for IT support. And to top things off, the cloud functionality of purchasing software means that data is easy to access, completely secure and backed up at all times.
An Important Takeaway for Salespeople and Customer Service
This isn’t an issue that’s only relevant to procurement. It’s also a topic that salespeople and customer service can learn from. For salespeople, the lesson is to keep an eye out for ways to make the lives of prospects easier. By actively looking for solutions instead of just trying to sell a product, salespeople can frame their offerings in a manner that is much more compelling to purchasing managers and other professionals within an organization.
The lesson for customer service is similar to that of salespeople. When someone calls a customer service representative, it’s generally because they have a problem that needs to be solved. Customer service professionals can get a leg up by always having their eyes open for the most efficient way to tackle problems. By being open to even better ways of doing things, members of the customer service team can make things easier for themselves and others.
Contact us today to learn more about how Bellwether Purchasing Software can assist your company in automating your purchasing processes. We offer a Free Live Demo and Free 30 Day Trial, no credit card needed.
The last thing any purchasing manager wants is for procurement disasters to blow up to the point where it’s costing the company resources and time. Although small errors and miscommunication are part of doing business, you still want to prevent major misfires that have a significant negative impact.
Even though it can be stressful to think about everything that can go wrong with tasks like vendor negotiations, thinking through this process can be a very useful exercise. By taking the time to carefully think through the purchasing process, it becomes possible to identify areas where things can go wrong. Identifying potential pitfalls in advance makes it much easier to figure out the best way to deal with them.
So in the spirt of preventing problems that can lead to major purchasing issues, let’s take a look at four ways you can proactively prevent a very bad situation:
Always Get Everything in Writing
When you’re on the phone with a vendor and you have a dozen other things on your to-do list that need to get done by the end of the day, it’s easy to speed through the conversation and assume that everything is in order. However, unless you have the exact order you discussed in writing, there’s always the possibility of something going wrong. That’s why you can save yourself a lot of headaches by getting details in writing. Even if you’re quite busy at the time, taking this action will save you from complications down the line.
Have a Policy in Place for Disputes
In a perfect world, purchasing managers would be able to go about their job without ever worrying about disputes. But because we’re in the real world, it’s important to understand that disputes may arise. The best way to minimize the negative impact of a dispute is to have a clear policy in place for resolving it. You want to know ahead of time what actions should be taken. This possible complication also shows the importance of keeping detailed records.
Prevent Things from Being Done Twice
In terms of wasting time and resources, duplicated procurement efforts are definitely a problem. One of the best ways to avoid this issue is to centralize all procurement efforts. A proven way to make that happen is by taking advantage of purchasing software. Implementing purchasing software will make it much easier for you to stay on top of purchasing activity and prevent issues like duplication from arising.
Whether it’s done deliberately or accidentally, buying items that aren’t needed may not seem like that big of a deal. However, this is an issue that can snowball and become a very real problem. To prevent that from happening, purchasing managers can enforce budget thresholds via our purchasing software.
Businesses rely on software more than ever before. The reason that modern businesses are so heavily invested in using software is because it can provide levels of productivity that wouldn’t otherwise be possible. While organizations use a mix of general software, there are also plenty of pieces of software that are made for specific departments.
Sales, operations and finance are all areas of a business that commonly use specialized software. In fact, these departments have been utilizing various forms of software for quite some time. Although there’s a lot of value in matching sales, operations and finance with the right software solutions, it’s important to understand that they’re not the only areas of a business that can benefit from specialized software.
As the role of purchasing continues to expand and grow, it’s easy to get caught up in all of the latest trends. While there is definitely value in knowing what’s new, it’s now more important than ever to have a really strong grasp on the fundamentals of effective purchasing.
The reason that fundamentals are so important is because many organizations are looking to enhance their purchasing through efforts like automation with purchasing software. Since automating different tasks can provide a major boost to what’s currently being done, it makes sense for companies to explore the different options that are available.
However, the key thing to remember is if there are currently processes in place that aren’t optimal, automation isn’t going to magically solve them. So before a company can reap the benefits of things like automation, they need to ensure that purchasing is being done in the best way possible. That’s where the three cornerstones of effective purchasing come into play:
Whether you’re speaking to a purchasing professional or someone in another department of an organization, most people agree that the role of procurement has noticeably expanded in recent years. One of the reasons that procurement has changed is because companies have realized that when handled correctly, procurement can have a noticeable impact on a company’s bottom line.
While purchase managers have more on their plate than ever before, that doesn’t mean training has kept up with the demands of this job. A common theme across companies of all sizes is that the current training for procurement just isn’t reflective of what’s required of this type of job on a daily basis.
Although the economy has been performing considerably better in recent years, that doesn’t mean that conditions are perfect. Since numerous companies are still facing a variety of challenges, they’re looking at many different ways to help strengthen their bottom line. One of the ways that more and more companies are looking at is through purchasing. While purchasing used to be viewed as a necessary business task instead of one that can boost margins or drive growth, that perception is rapidly changing.
The Role of Purchasing
At its most basic level, purchasing finds ways to optimize costs. It then communicates those savings with the rest of the organization. And as purchasing departments become more sophisticated and empowered, they’re able to deliver even greater value to organizations. Managing large offshoring operations, enabling new processes to be introduced and negotiating huge contracts are a few more examples of how purchasing can have a direct impact on a company.
Even though purchasing is a dynamic field with a bright outlook, there’s currently a shortage of talented individuals entering it. Not only is the demand for purchasing professionals already in place, but companies are willing to pay very attractive salaries for people who can deliver results.
For younger employees, another very appealing aspect of a purchasing career is the ability to be exposed to senior level stakeholders. Within weeks, there’s a very good chance that a new purchasing employee will be interacting with senior stakeholders. This is great for learning and potentially opening all kinds of doors.
It’s also worth mentioning that in most organizations, advancement within purchasing is something that’s driven by actual performance instead of politics or seniority. If you’re the type of person who wants to let your work truly speak for itself, you should strongly consider a career in purchasing.
Purchasing Challenges and Solutions
Another very appealing trait of a purchasing career path is it offers an opportunity to engage with a wide range of sectors. Having this kind of rich cross-industry experience is something that’s very valuable for building a strong career.
On top of that, being in this line of work means that you will really develop your technology skills. In fact, a purchasing career can enable you to set the course of your organization’s use of technology. For example, if you discover that their purchasing process is being held back by manual roadblocks, introducing purchasing software such as Bellwether Purchasing Software can be a game changer. You will want to research purchasing software and be sure to choose one that is capable of customized work flows and automating purchase orders, invoices, and inventory. Fully utilizing the right purchasing software will maximize the results driven by purchasing.
So whether you’re a new graduate or have decided that you want to steer your existing career in a new direction, a purchasing career is definitely an option that’s worth your consideration.
It’s no secret that purchasing is going through some significant and rapid changes. While the changing landscape of purchase management is clear, what isn’t as evident is whether or not professionals are keeping up with skillsets needed to adapt to those changes. Given that as many as one-third of all professionals are involved in projects that are attempting to accomplish something that hasn’t been done before, it’s easy to understand why new additional skillsets are so important.
Taking a Critical Look
Ensuring that purchasing is ready to ride those changing tides starts by thoroughly evaluating talent capability. By taking the time to go through this type of assessment, it becomes possible to accurately determine if each stage is going to be deliverable. One reality that many organizations have to face as they grow is that the processes or people that got them to a certain stage may not be the right fit for getting to the next stage.
The Importance of Negotiation and Other Skills
Of all the skills that are viewed as vital to purchasing management but are most often lacking, negotiation is near the top of the list. That being said, due to changes within this field, it’s no longer the skill that’s at the very top. The new reality of purchasing means professionals need the right skills to handle a client-orientated approach, as well as have the ability to sell the function of procurement to other internal stakeholders.
So, how can department heads ensure that their team has the right skills? One option is to start at the top and ensure that the right skills are passed down. Another option is to look to outside sources for proven training. It’s also important that professionals at all levels are open to the increased usage of technology.
How to Stay Ahead of the Curve
Although all the change within this field may initially seem to paint a somewhat bleak outlook for purchase managers, that doesn’t need to be the case. On the contrary, professionals who stay abreast of changes and are willing to adapt should feel that there’s a lot to be excited about. Since technology is at the heart of what’s driving changes within purchasing, professionals can stay ahead of the curve by embracing the right type of purchasing software.
For purchasing managers who want to maximize the effectiveness of their purchasing process, Bellwether Purchasing Software is the optimal purchasing software to use. With a long list of features that range from customized work flows to enforcing budget thresholds, our purchasing software is specifically designed to ensure that procurement departments have everything they need to stay on top of changes. If you have any additional questions about how Bellwether Purchasing Software can keep your purchasing practices ahead of the curve, don’t hesitate to contact us and learn more about the benefits of our purchasing software or sign up for our Live Demo or FREE 30 Day Trial.