Software was the ideal way for us to codify best practices in procurement performance management: we structured it around analysis, planning and controlling

Analysis

Not just about analysis … but in fact about identifying where procurement opportunities lie … and we are not talking about the mere identification of price differences, but rather offering a causal effect view of these price differences ... because in our view it is much more valuable than just showing you that you pay different prices for what seems to be the same product / service ….

What more … well … we actually offer you the opportunity to measure yourself against the rest of the market by leveraging third parties that provide category specific expertise with actual and forecast price development at a level of granularity which at least we have yet to see on the market … we are conscious that it cannot be perfect, but what’s for sure is that it is directionally right …

We also extend our analysis to cover different aspects of risks … whether it is supply risk from single sourcing situations on strategic categories … or financial risks from exposure to market fluctuations …

And whilst our analysis modules are about spend, we offer similar type of analysis in payables and inbound inventory … why? Simply because price is often traded off with payment terms and also order sizes ,,, so we just want to make sure that what appears as a saving really is a saving …

Planning

The natural question after identifying opportunities is what you do next … many software vendors would claim “hey here are your savings right there so go and launch an e-auction or an RFX” …. well, these vendors have not worked in purchasing we guess … because what we do next is … not much actually …. these savings opportunities are just … opportunities … capturing them does require the intelligence of your organization, not our software … we have highlighted the gaps and also the reasons for these price differences, but the choices are fundamentally strategic, not anything a software can do … so it does require a cross functional team to analyze whether certain changes that would reduce costs can be implemented and to which extend …

Now , this is when we come to play … as you develop these strategies we can help to record these choices, or in other terms the actions based on best practices levers that you have agreed to implement cross functionally … we can also help you to estimate the likely impact and set targets in terms of expected spend or savings which can then be tracked later on ….

Controlling

Now that opportunities have been translated into agreed upon plans with expected savings, the next natural next step is to make sure that it happens … so that’s what we have decided to do through our controlling modules …

In essence controlling modules are the guardians of value from our perspective … this is where we really help you track that savings hit the bottom line … and if they don’t according to plan, this is where we help to figure out why …

Now, it is not just about savings …. It is about value at large … what we mean by this is that in some case s it is ore advisable to increase cost than to save …. We know this may sound weird for many, but if you are relying on supplier and one product to generate the majority of your profits, you may whish to have an alternative supplier that will get part of the business although you may not take advantage of past volumes discounts to ensure resilience ... well … this is up to you … but we do provide controlling indicators, in other words KPIs, that go beyond the pure financial measurement …