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WHAT GOOD BUYING MANAGEMENT LOOKS LIKE
Strategy · A standard sourcing process is embedded and adopted across the organisation. · A prioritised programme of sourcing activities is planned out and suitable resources are allocated to undertake these projects. · There is compliance to a common contract management approach for spend on third- party products and services. · Off-contract spend is minimised. · There is compliance to a procurement- to-pay approach for spend on third-party products and services. Process · Market intelligence is collected and collated in a timely way and used to inform the sourcing process. · A cross-functional team is set up to provide inputs to sourcing activity. Finance, legal, risk, procurement and the business should be involved in a typical sourcing process. · Procurement is involved early in the sourcing process. · Procurement fully understands the business requirements. · Spend is tracked against contracts. · There is a process by which contracts are migrated to a contract repository. · Service-level agreements (SLAs) are tracked. · Contract renewal dates are monitored. · Terms and conditions are standardised to reflect business-wide needs. · There are methods for raising orders, managing approvals, receiving invoices, managing exceptions and paying invoices. · There is ability to match purchase orders, contracts, invoices and delivery notes (four-way matching). · The effort (and cost) of administering a procurement-to-pay cycle is minimised. People · Commodity managers are required to undertake sourcing projects. · Commodity managers are able to consistently track the supplier’s performance against agreed KPIs. · People are able to administer the contract throughout its lifetime. · Legal is engaged in contract management.
Strategy
Buying Management
Process
People
Technology
Technology · The benefits and suitability of eSourcing are understood and employed, where appropriate. · An automated approach is in place to notify users of key contract dates and milestones. The key dates and clauses of a contract are monitored and notifications are sent to the appropriate stakeholders. · An electronic system automates the purchase-to-pay (P2P) process and minimises administration costs. All spend on third-party products and services is administered by P2P systems. · Consolidated data and flexible reporting is available.
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