1 / 37

Conference Title Date

Conference Title Date. Martin Bolden. An Introduction to Procurement Management Information. IN THE SPIRIT OF TRANSPARENCY…. PROCUREMENT MANAGEMENT INFORMATION. Why are we doing this? What problem are we solving? Is this actually useful? Who is it useful to? Will this change behaviour ?

aretha-olsen
Download Presentation

Conference Title Date

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Conference Title Date Martin Bolden An Introduction to Procurement Management Information

  2. IN THE SPIRIT OF TRANSPARENCY…

  3. PROCUREMENT MANAGEMENT INFORMATION • Why are we doing this? • What problem are we solving? • Is this actually useful? • Who is it useful to? • Will this change behaviour? • Is there an easy way?

  4. Ask questions How many people in the room have conducted a spend analysis in the last year? How many of you found it useful?

  5. WHY BOTHER DOING SPEND ANALYSIS? • You’re likely being asked to cut spending, but not services. • Increased pressure to collaborate internally and externally • Concern with local/small/ sustainable suppliers • Spend transparency or FoI

  6. TAKE ACTION Spend analysis has little value as an intellectual exercise. When it is used as a strategic business tool it becomes a key enabler for change.

  7. HAVE A GOAL IN MIND • Manage spend more strategically • Manage spend activity more efficiently • Change buyer behaviour • Increase spend under contract • Procure sustainably • Buy collaboratively • Deliver savings

  8. WHAT DO YOU NEED TO ANALYSE? • Your supplier base • Your spend categories • Common suppliers • (Non) Contracted spend • Commodity detail

  9. DATA SOURCES • What sources of data are readily available to you? • Accounts Payable • PCard • Purchase Orders • Contracts • Think about how complete a picture is necessary to achieve your goal

  10. THE FIVE PIECES OF DATA YOU NEED TO GET STARTED • Supplier Name • Supplier Address • Transaction Number • Transaction Date • Transaction Value

  11. Transforming Data into Information • Data: • raw, unorganised facts that need to be processed. Data can be something simple and seemingly random and useless until it is organised. • Information: • When data is processed, organised, structured or presented in a given context so as to make it useful, it is called Information. Source: http://www.diffen.com/difference/Data_vs_Information

  12. WHAT YOU DO TO THE DATA… Implement a repeatable process if you want to track performance over time! Spend M.I.

  13. THE TYPICAL APPROACH TO IN-HOUSE SPEND ANALYSIS

  14. IF YOU USE A THIRD PARTY, YOU SHOULD EXPECT

  15. POTENTIAL SOLUTIONS

  16. WHAT CHALLENGES MIGHT YOU FACE? • Raw data is frequently incomplete and of poor quality • Access to data may be difficult • Multiple and poorly integrated systems (AP, pCardetc.) • Time, skilled resources and support may be lacking

  17. KNOW WHAT YOU ARE GETTING INTO AT THE BEGINNING • Software tools are not automatic. • Accurate classification is not easy. • Data will arrive in many formats. • Data must be checked for errors. • Access to the raw data isn’t necessarily straightforward. • Secure the support you need. • Get a set of tools you can use or learn to use the ones you have.

  18. WHAT THE INFORMATION CAN FACILITATE • Deliver Savings • Improve Processes • Change Buyer Behaviour • Manage Supplier Relationship • Manage Risk • Recover Over-payments • Buy Collaboratively • Support more SMEs • Source More Locally • Ensure Legal Compliance • Benchmark Relative Position • Evidence Success Spend Data

  19. WHO COULD USE THE INFORMATION? • Procurement Buyers • Procurement Managers • Contract Managers • Budget Holders • Department Heads • Buyers • Finance Department • Spend Data • Accounts Payable • Audit/Legal Departments Spend Data • Diversity Program Manager • Economic Development • Environmental/SustainabilityOfficers

  20. EXAMPLES OF SPEND MANAGEMENT PROJECTS 1 2 Finding Savings Long Tail Consolidation Invoice Consolidation 3 4 Improved Terms Category Extension 5 6 Compliance, Contracted Suppliers Category Rationalisation 7 8 Collaboration Category Reengineering

  21. Which suppliers should I seek weekly/monthly invoices from? • Which categories of suppliers are giving me an invoice volume problem? • Which suppliers would be best to move order and payment to pCard? • How much could I save by moving to pCard? • INVOICE CONSOLIDATION

  22. 5,457 invoices were processed where the value of the invoice was less than £50. • INVOICE CONSOLIDATION

  23. Which suppliers do I spend less than £1,000 per year with? • Which suppliers do I only have one transaction with per year? • Which departments are using a lot of ‘one off’ suppliers? • Which categories do we have a lot of small suppliers in? • LONG TAIL CONSOLIDATION

  24. 935 vendors where less than £1,000 was spent in a 12 month period. That’s 55.92% of the vendors, but only 1.68% of expenditure. • LONG TAIL CONSOLIDATION

  25. MANAGE STRATEGIC SUPPLIERS • Which suppliers do I spend the most with and how many departments do they supply? • How many other suppliers are in the same category as my top tier suppliers? • Are all of my departments getting the same “best rate?” • How much do my top tier suppliers rely on my business? • How dependant am I on a supplier?

  26. 61.79% of this college’s spend is with the top 20% of suppliers (125) • MANAGE STRATEGIC SUPPLIERS

  27. Which suppliers enjoy a relative monopoly of supply to my organisation? • Which categories do I have too many suppliers in where aggregation could drive costs and prices down? • What contracts are coming up for renewal where I could rationalise or extend my supplier base? • CATEGORY RATIONALISATION/ CATEGORY EXTENSION

  28. 11 Printing Services Providers one large, 2 medium and 8 small. • CATEGORY RATIONALISATION/ CATEGORY EXTENSION

  29. Which departments aren’t using the preferred/ contracted supplier in a given category? • Which categories of spend don’t have any contracts in them? • Are there instances where we spend more than was on the original contract? • Is my data source up to date enough to deal with off-contract spend quickly? • COMPLIANCE, CONTRACTED SUPPLIERS

  30. 36% on average spent with contracted suppliers. • COMPLIANCE, CONTRACTED SUPPLIERS

  31. Which suppliers does my group already share and how much is spent with those suppliers? • Which categories does the group have the greatest spend/ greatest number of suppliers? • When are the current contracts for members of the group expiring so that we can collaborate? • COLLABORATION, COMMON SUPPLIERS

  32. There are 16 suppliers who supply all 4 colleges, with a cumulative spend of £3.5m. 62 suppliers provides goods and services to 3 colleges who spend £12.2m with them. • COLLABORATION, COMMON SUPPLIERS & SPEND

  33. ANALYSIS SOFTWARE • Analysis tools are simply there to assist you in your search to extract valuable information and direction from data. • The greatest tools can only deliver limited information if the data they are analysing is incomplete or inaccurate

  34. ANALYSIS SOFTWARE • The #1 impediment to information management success? • Accessing relevant, timely or reliable data. Source: Information Week – November 2013

  35. CONCLUSION • Have objectives in mind • Spend Analysis is really the first step • Get the data in shape first

  36. QUESTIONS/THOUGHTS/COMMENTS

  37. FOR MORE INFORMATION For more details about how Spikes Cavell can help you to transform your data into valuable spend management information contact : Martin Bolden 07500 081425 martin.bolden@spikescavell.co.uk

More Related