How can savings recognition improve and have an impact on your procurement organization?
1-Establish consistent savings definitions and types
The lack of consistency in the definition of savings has caused misinterpretations between Procurement and Finance. Savings becomes a function of the responsibilities within an organization. Personal metrics, planning needs, and analytical skill sets for each part of the business creates and understanding of what “savings” means. By establishing a consistent definition of savings, you will improve the value of procurement while increasing organizational performance.
2-Assess savings maturity and create IT Alignment
Establishing consistency starts with understanding where your organization is at in your savings lifecycle and if you will go beyond the price of cost avoidance. Are you still in the cost identification stages? What type of information are you able to pull into your systems? What can you aggregate in order to provide a holistic picture?
3-Drive for savings recognition once automated
Once definitions are aligned through the use of process and automation, procurement can use the established, consistent processes to drive savings to the rest of the organization. To further improve your spend analytics capabilities and drive savings recognition down the path,
research a savings tracking tool.
