If not, you should, because with tariffs rising, markets falling, inflation out of control, sales dropping (as entire markets are cut off with sanctions and trade wars), we’ve gone beyond the point where every dollar counts to the point where every penny counts on every purchase because those pennies add up as every 100 purchases is a dollar and every 100,000 purchases is $1,000 and when money is as tight as it is now, that is actually value (especially for an organization making millions of purchases a year).

And right now, organizations are wasting a lot of dollars through the entire purchasing process. From poor sourcing strategy and process, to poor sourcing and negotiation, through poor purchasing execution, and poorer logistics management, to poor invoice and payment management. Every step without good cost control adds cost to the process, at a time when you need to be taking cost out just to survive.

And we know organizations are losing across the board because the following is required to keep costs in control:

• good processes at each step
• (near) real time market intelligence at each step
• good systems supporting each step
• continuous monitoring at each stage

And we’ve never seen an organization, even a best-in-class organization, that has all of this for their Procurement department. In fact, it’s rare to find an organization that has more than half of this. It’s now at the point where your organization may not survive if it does not have:

• well defined processes for
  • supplier discovery and management
  • sourcing
  • contract award and management
  • procurement, on-and-off contract
  • invoice management and accounts payable
  • logistics and warehousing
  • ongoing analysis
• (near) real-time market intelligence at each step
  • current, financially stable, accessible suppliers
  • current commodity costs, average overhead costs by region, tariffs, etc.
  • current best practices, standard clauses, and insurable risks
  • market availability, quality, delivery times, remaining contractual commitments
  • current entity information, payment terms, standard processing times, community intelligence on supplier OTD
  • carrier availability, costs, surcharges, etc.
  • changes in spend trends and curves, etc.
• good systems/modules supporting each step
  • supplier 360 module (not just SIM/SRM/SPM .. all supplier data and interactions)
  • sourcing (RFX) management
  • contract negotiation tracking, signing, and ongoing management
  • e-Procurement that supports ALL purchases through the system
  • I2P with automated invoice processing and workflows
    (85% should be touchless on implementation, 95%+ over time)
  • logistics booking and carrier monitoring
  • best in class spend and performance analysis that updates at least daily
    (and regularly re-runs best-in-class trend and outlier analysis and alerts you to unexpected changes)
• … with built-in alerting when something unexpected happens or doesn’t happen on schedule / as expected

And you don’t. But you need this now more than ever. So, if you don’t have:

• processes, define them; they can be basic to start; for example, classic 7-step sourcing is enough to start (even though there are some more refined 11 step processes)
• market intelligence, get yourself some; in particular, supplier discovery as some of your suppliers will go out of business, be unreachable, or get too expensive in the days to come; cost modelling for major spend categories to understand true costs for better negotiations because even if it only shaves half a percentage point on average, that’s still 500K on a 1M category (and you can get some of these solutions for under 100K a year), and those hundreds of thousands quickly add up to millions; and major news/event monitoring to pinpoint emerging risks as fast as possible
• modules supporting the entire S2P process, acquire them; note that most of these don’t need to be BiC; for example, all of the major suites will tout the tens or hundreds of millions their big customers have “saved” with their solution, but what they won’t tell you is that at least 90% of that savings simply resulted from the client implementing a good process supported by a tool with a decent workflow solution; in other words, you don’t need the multi-million dollar solution (to start), you’ll see the same benefit from a six figure suite that is better than average in the key modules that matter to you (especially since it will take you years to master the new processes it will support, meaning that for a big suite, it’s usually five years or more before you can see more value than just going with a basic solution given that the journey to Best in Class, as determined by Hackett in the mid moughts, is at least eight years)
• continuous data modelling and analysis, start now; with your spend analysis and performance tool updated at least daily

you need to make a plan to incrementally acquire what you are missing, most critical need first, until you do. (Remember, don’t try a big bang implementation. No matter what the vendor or Big X will tell you, those always end in big booms.)