Thursday, 28 August 2014

The Next Weakest Link (Spend Control Demystified – Part 10)

Once you understand the size and nature of Spend Control and how it will continue to evolve over time, your approach needs to reflect what is realistically achievable.

At the same time, your business will also evolve and grow in skills and knowledge of Spend Control. In other words, constant evolution.

The question becomes “Where to start?” and the answer to that question can change from organisation to organisation. Once you decide “Where to start” the question becomes “What next?”

For the majority of organisations, the implementation of a procurement process represents the area of the business that will benefit the most, as well as deliver the fastest return on investment.

If you could achieve a fast-win, high adoption rate and demonstrable business benefits in this core activity, the roll-out of further parts of the Spend Control strategy becomes significantly easier.

What is much more important is the ability of your staff to understand the new concepts, review the current business processes and identify the next ‘weakest link’. Once an issue is recognised, they will have developed the skill to balance “what is practical” against "what would be ideal”. And every subsequent step builds on the last.

This methodology has a number of significant benefits.
  • It reduces the initial cost
  • It enables all future decisions to be founded on experience
  • It ensures user ‘buy-in’ at each stage
  • It allows each investment to deliver the maximum return
  • It allows complete control of when the investment takes place
  • And, it allows the culture of the organisation to evolve around high Spend Control adoption

Mistake: Spending too much at the outset, before you really understand enough to make the investment as effective as possible.

Tip: Spend Less – Achieve More. Benefits can only occur when systems are live. Until that time they are an overhead. Effective phasing will deliver benefits during the project.

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