Procurement has assumed a strategic role in many organizations where the businesses have realized the benefits of strategic sourcing. Supplier data and the intelligence derived from it is highly valuable for an organization’s long term strategic planning and the effectiveness of the procurement function. If organizations procurement decisions are backed by current and historical data on suppliers, critical issues of quality and performance can be analysed with respect to the negotiated savings from the buying process.
A substantial percentage of organizations link their spend management to their supplier performance, states a recent study that I read from PwC. According to the study, suppliers who provide critical product, parts or services are increasingly becoming stakeholders in their partner organizations’ growth strategies. Here is the catch! Research data also suggests that, more often than not, the procurement function and its decision makers are unprepared for complex negotiations with suppliers. Aggressive negotiations turn out to be unfavorable, as concessions from difficult negotiations hamper the suppliers from delivering quality products and services.
Spend patterns tell you only one side of the story. Spend optimization no longer means buying at the lowest possible price; it represents the awareness that the decision makers have about the company’s buying habits and more importantly its suppliers. High quality and structured data on transactions with suppliers and trading partners gives organizations the artillery to maximize negotiated savings. In today’s dynamic business environment, business solutions and enabling technologies are valuable aids for driving business growth.
Supplier performance management tools let you identify the best possible buying sources quickly and cost-effectively. Such tools help in procurement transformation, through optimum pricing, quality and sources of supply. System integrators like Bristlecone specializes on procurement transformation. We can unleash the value of your procurement function rapidly through effective use of cutting-edge technologies. We implement proven supplier performance management methodologies and solutions to effectively monitor supplier data and address supply risks proactively. We enable best-fit solutions, leverage benchmark data and offer consulting on data management best practices. Our solutions are effective for tracking metrics related to all the communication, deliveries and any reported issues with suppliers and also improve new supplier on-boarding process.
The idea is to create the optimum sourcing environment so that you are able to match your needs with what best the partners have to offer. Procurement intelligence should be leveraged in a manner that the company gets the advantage and hence has the ability to become a strong negotiator. Successful negotiations are necessary for business success and they play an important role in building mutually beneficial and collaborative relationships with key suppliers.