The problems...
The growing spend profile, supplier networks and business-wide buying activities outside of direct Procurement and HR control is causing increasing issues for businesses.
Value for money
Increasing levels of ungoverned spend, often in numerous small purchases across multiple suppliers, is resulting in low value for money.
Choice overload
The ever-increasing choice of ways to ‘get things done fast’ should drive better outcomes. But without Procurement's involvement, a lack of informed decision-making and buying processes are more often resulting in avoidable overspend, added risk and inefficiencies.
Growing 'grey areas'
Services is often used to bypass centralised Procurement, FInance & HR processes. This creates a growing 'grey area' of spend & services which is often difficult to distinguish between on-site contractor provision and fully-outsourced service delivery. This not only results in suboptimal spend through more expensive, ungoverned routes, but also added risk of 'hidden headcount'.
Scope creep and supplier spats
Purchasing left to local areas can result in poorly defined Statements of Work and supplier contracts. This risks issues with outcome success, supplier accountability & clarity of scope, increasing supplier disputes & performance management issues.
Missed milestone management
Lack of time amongst internal buyers to track supplier progress against agreed outcomes further compounds the likelihood of scope creep, undesired outcomes and supplier conflict.
Risky business
Businesses can become increasingly exposed to risk from suppliers who are often already up and running, on a PO or even paid before the compliance checks are complete.
Stunted strategy
Lack of data and control stunts the ability for central Procurement and HR teams to make strategic procurement decisions and drive continuous improvement.
Businesses become unable to develop valuable, long term supplier relationships across their 'tailspend' portfolio.
