At Sievo, we make practical sense of strategic purchasing by recognizing that procurement is more than an operational process

Execution is nothing without foresight

In the past decade, procurement practitioners focused on improving procurement by doing a better job of what they were already doing. Procurement gained in importance, reaching greater levels of efficiency through the use of a number of operational tools. The new tools helped get prices down faster, send purchase orders out faster and register suppliers faster.

Unfortunately, these improvements could only go so far. Strategic sourcing is more than getting things done right. It is about doing the right things. Procurement is not just the procure-to-pay process, but also an insight-to-foresight process. A strong strategic sourcing program should allow you to understand your organization’s spend, predict demand and assess risk, manage a portfolio of projects and allocate your resources to the best ideas. Finally, it should allow you to monitor the results of your strategies.

We call these seven steps the Idea-to-Cash Process, which can now be achieved with Sievo’s four integrated solutions.

Spend Visibility

Spend visibility is often called a commodity. And quite frankly we tend to agree. For us, spend visibility is an enabler to procurement performance management and hence has its place in our solution suite.

But our spend visibility is different. Ours will not only give you a perspective of past purchases, but will provide you with visibility on purchasing-driven working capital, namely your payables and inbound inventory.

Why would this matter? Well, in the end it is very much about cash management. Saving on price for shorter payment terms and higher inventories might not necessarily be the best choice for the company. Our tools provide you with the elements you need to see and understand the tradeoffs your team is making for the entire purchasing cash cycle.

At the same time, you’ll only see what you need to see. We indeed do not believe that you need the same level of spend transparency for non-strategic items that you might need for strategic items. There is no point in over-engineering your classification tasks if you will make no use of knowing, say, what type of pens and paper you’re buying.

To help you decide what items are strategic, we provide internal benchmarking capabilities as well as external benchmarking services. This will provide you with an out of the box assessment of where money can potentially be saved.

Savings Program Management

When opportunities are identified they are far from actually being “savings”. Your teams must assess the opportunities in more detail validate them with a number of stakeholders, and sign new contracts. Only when the contracts have been signed, will the controller be able to verify the potential.

Multiplied by the number of ideas your organization can generate and you will soon be faced with a huge list of opportunities that need to be managed, each with distinct benefits, degree of complexity and resource requirements.

Our savings program management tool allows you to coordinate, value and prioritize these multiple projects that will eventually have an impact on your business.

Savings program management mirrors the cross-functional nature of strategic procurement. Our tool’s capacity to manage user roles and its in-built workflow makes it a very powerful and highly distributable solution that will help you ensure no stone is left unturned.

Spend Budgeting & Forecasting

What spend visibility is for the past, spend budgeting & forecasting is for the future. Our spend budgeting & forecasting toolkit gives you the ability to test different scenarios and see their impact on future spending and profit.

Like any other solution within Sievo, spend budgeting & forecasting benefits from other solution areas, leveraging past information from spend visibility as well as drivers of demand to predict the future.

Sievo’s spend budgeting & forecasting module allows you to build scenarios around your spend based on a number of assumptions such as future development of commodity prices, currencies or even your company’s geographical business distribution.

Gaining the ability to better assess demand is a true asset not only to gain precision on purchasing impact into the bottom line, but also in managing and hedging against risk or improving the top line by moving resources to where they are more needed.

Procurement Controlling

Monitoring execution and business alignment is the last element of a complete strategic procurement solution.

Savings are often claimed, but seldom measured. Even when they are measured, they tend to generate endless discussions between finance and procurement, which often do not see eye to eye.

Sievo’s procurement controlling solution has been designed to address this very issue and reconcile purchasing with finance. Our solution enables clients to systematically measure procurement contributions to the bottom line and isolate other contributing factors to spend developments, be they internal or external, controllable or not.

Beyond reconciling procurement and finance, Sievo’s procurement controlling offers a dynamic actionable environment to drill down to root causes all the way back to the original transaction, pinpointing the sources of execution failure that constantly lead to cash leakage compared to their forecast savings.

And while some have compared our solution as a “Finnish Inquisition” (with a smile), in the end Sievo’s procurement controlling module identifies not just transactional problems, but business misalignments and strategic conflicts between functions that lead to execution failure. Far from being a compliance tool useful in chasing down a few misfits, procurement controlling is by its cross functional nature where strategy begins.