“Most World Class Organisations have realised that procurement is a key component for sustainable business success.” James Yates, COO of Cutting Edge Commerce tells Smart Procurement. However, the lack of visibility into accurate and complete transaction data is hampering company performance.  Usually, large companies commission an outsourced service provider to develop a solution which would provide the necessary insight into the company’s spend profile and procure-to-pay activities…

“This route was usually taken as a result of the firm realizing its own
limitations in accessing reliable information from its ERP, manual and
other systems.”

“Some other firms, choosing to keep the data confidential, have resorted to using scarce internal resources to extract the required data without having the expertise or technical know-how to do it.  This has always been a very expensive and not very efficient solution.  It has been estimated that not more than 10% of procurement managers have the necessary expertise to extract management information on which critical business decisions can be based. “

“Progress has recently been made by specialist service providers  in developing modular ready-to-run solutions which obviate the need for hours of software development.  Procurement specialists and I.T. professionals have collaborated to create products which give immediate and clear insight into mountains of transaction data.  Within hours the data is converted into usable information and supplier intelligence which can be used in determining strategic direction.  ”

“In many instances the new ways of data interrogation provide instances of inherent weaknesses in underlying processes. If the master data is not properly controlled and managed, many resulting transactions and activities may be unprofitable and worse, contrary to company policy. ”   

“Many large organizations have implemented one or more “business intelligence” modular solutions within the procurement function and had high levels of success for the outlay required.”

The approach used is to use accepted processes for developing a business intelligence system, viz.
•    Define and agree outcomes with the client
•    Align reporting requirements with the input sources available
•    Identify data sources required
•    Validate the quality of the data available
•    Collate all data into a usable structure
•    Create intelligible management information

However, the last item is where most traditional methods fail…

The client would always require assistance to interpret the outputs. The latest thinking provides outputs which are clear, concise and designed to highlight the critical issues on which action can be taken.

“Auditing the procurement function internally has always been a challenge and is rarely conducted regularly in the same way, and the results are not often acted upon appropriately. There are regular reports in the press relating to unauthorized procurement and irregular sourcing activities in all sizes of organizations, both in the public and private sector.  Solutions are now available on a plug-and-play basis to audit the procurement function on a formal and consistent basis which effectively removes any personal and emotional issues.”

James Yates of Cutting Edge Commerce can be contacted on 0828223128