Get More Value Out of Your Indirect Procurement Expenditure and Avoid Risk in the Process

Business / Success Story

Get More Value Out of Your Indirect Procurement Expenditure and Avoid Risk in the Process

COVID and the current economy are applying pressure to procurement specialists that is mounting at a rate beyond what many have experienced in the past. A look at the Supply Management Insider whitepaper — Elevate Indirect Spend to Connect Customers and Suppliers — echoes the challenges that we hear on a daily basis in our dealings with indirect procurement professionals that are working hard to reduce risk, manage costs and add value to their organisations. 

As a business that delivers talent solutions which do just that — reduce risk, manage costs and add value by increasing visibility — it seemed worthwhile to take a look at the key points coming out of the whitepaper, with a comparative look at how talent solutions can help you to achieve all three.

Reduce Risk

The increasing hyper-connectivity and complexity of our world presents risks as well as opportunities to businesses. Unmanaged indirect procurement spend, combined with COVID has left us with the “single biggest challenge faced by supply chains in the 21st century”, and it’s exposing risk and vulnerability in a way we have never seen before. By extension, this impacts workforces. Those that are not managed are a considerable risk in a VUCA world. 

Also at risk is CSR. Brands lacking visibility across their supply chain risk unknown links to malpractices, which could expose and damage corporate reputations, as well as hinder business continuity. The more suppliers and contractual agreements in circulation, the more risk to costs and CSR. 

What’s more, the elephant ever-present in the room, is the mounting risk of exposure to cyber-attacks. Without effective infrastructure and security measures, such attacks are likely lurking just around the corner. 

Manage Cost

Where there are huge spends, there are huge opportunities for saving. The report suggests that indirect spend is expanding across the world at a rate of 7% each year. In most organisations, indirect spend accounts for more than 20% of overall expenditure, and for some that reaches as much as 30%. 

Technology presents just one of those massive opportunities to reduce costs. With digitisation proven to reduce purchase-to-pay costs by up to 42%, businesses that are still behind on digitisation are missing out on significant cost savings. 

Add Value

It’s not a shock to learn that the role of CPOs and indirect procurement professionals is getting tougher year on year. With mounting pressure, thanks in part to Covid and the current economy, it’s no longer just enough to reduce costs. Reducing costs is a given, what’s also expected is that you add value; contribute to growth, productivity and sustainability of the company. This all requires visibility. 

The pressure to add value is all well and good but demonstrating this is challenging. Especially when considering that most procurement professionals are told that technology holds the key, but departments are under-skilled to leverage its use. 

This calls for a better process, a Vendor Management System designed custom to suit the needs of your business. 

What That Actually Looks Like

Not too long ago, a key client of ours was targeted in a global Cyber-Security attack to one of their critical business systems. The attack exposed sensitive data about their workforce — personal information, budgets, salaries and confidential supplier agreements. They needed a risk mitigation plan and called on us to help. 

The first step in the solution was to implement a bespoke Vendor Management System built on a Salesforce platform that would stand up to the highest security standards required.

With the platform built, we began to rationalise and standardise both their supplier and in-direct employment contracts — across their entire contingent workforce. As part of this renegotiation, we were able to remove over 50 contractual agreements, that significantly reduced the future risks associated with costly co-employment claims and unreasonable future supplier fees.

The result for this client was a no-cost Vendor Management System and a projected saving of over AUD$1.25 Mill in the first year of running this managed contingent workforce solution.

Our Talent Solutions team can help you understand what’s going on in your world by putting in place technology that doesn’t cost you a thing, gives you absolute visibility and helps you to minimise risk and reduce cost through the combination of powerful technology and people.

If you’d like to know more about the specifics of this case study, or would like to take advantage of a no-cost, no-obligation diagnostic across your contingent workforce, get in touch with Launch Talent Solutions today.

Select the fields to be shown. Others will be hidden. Drag and drop to rearrange the order.
  • Image
  • SKU
  • Rating
  • Price
  • Stock
  • Availability
  • Add to cart
  • Description
  • Content
  • Weight
  • Dimensions
  • Additional information
Click outside to hide the comparison bar