Uncontrolled procurement brings risks and higher costs. Find out how to get a grip on the procurement process and create value.
Uncontrolled
Buying outside the process leads to higher costs and unknown risks.
One platform
Sourcing, contracts and invoices in one chain make steering possible.
Start with insight
Without visibility on current spend, every measure is a guess.
"Uncontrolled spend outside authorised suppliers and contracts - also known as maverick buying - can pose significant risks,’ says Sander Veenstra, Solution Consultant. ‘Think higher costs, contract breaches and quality risks. This not only makes the procurement process less efficient, but also less transparent."
In this blog, Sander shares valuable insights and practical solutions to manage spend and create more value for the entire organisation.
The impact of uncontrolled spend
"When employees buy outside authorised channels, it undermines the benefits you have built with your suppliers," explains Sander. This leads to:Missed economies of scale
"By centralising procurement, organisations can negotiate better prices and benefit from volume discounts."
Reduced collaboration and innovation
"Structural relationships with suppliers provide opportunities for joint product development and improved services."
Limited transparency and control
"Without insight into expenditure and supplier performance, it becomes more difficult to make strategic decisions."
Internal inefficiency and distraction from core activities
"When procurement is fragmented, it leads to additional administrative burdens and fragmented responsibilities internally. Streamlining procurement allows employees to focus on their core business and creates more synergy within the organisation."
Procurement in 5 steps
Discover how to get a grip on spend that now bypasses the process.
Source-to-Pay
By following a structured Source-to-Pay process, procurement stays within guidelines and costs are controlled. Below, Sander shares some effective approaches.- Embed Source-to-Pay in strategy: "Make sure Source-to-Pay is aligned with the organisation's mission and vision. Procurement and the finance department play a crucial role in compliance."
- Work with stakeholders: "Involve departments in the procurement process, identify bottlenecks and ensure use of authorised suppliers. This starts with management: when they breathe and propagate the importance of controlled procurement, it can be effectively implemented throughout the organisation."
- Standardise processes and monitor KPIs: "Think process-oriented, eliminate silos and measure contract compliance, order invoice links and spend by category."
- Implement effectively and automate: "Start with strategic suppliers, integrate webshop links and XML invoicing for quick impact and control of procurement spend."
A streamlined approach for greater control
"Structuring procurement processes properly and making the best use of data enables more efficient operations and reduces risks," advises Sander. "Applying smart technology and clear guidelines helps to get a grip on the procurement process, without losing flexibility within the organisation."
"By focusing on collaboration and transparency, all stakeholders can benefit from a streamlined process that contributes to cost savings and long-term value creation," he adds.
“Structuring procurement processes properly and making the best use of data enables more efficient operations and reduces risks.”
Sander VeenstraProduct Manager | ISPnextIt starts with strategy and insight
"Managing uncontrolled spend starts with a strategic approach and insight," concludes Sander. "By deploying the right processes and solutions, organisations can control costs and risks while working towards sustainable and efficient procurement strategies."
Want to receive more valuable insights on how to optimise procurement processes? Then get in touch or download the whitepaper.
Frequently asked questions
Uncontrolled procurement can lead to financial inefficiencies, quality problems and legal risks, such as breach of contract or failure to meet compliance requirements.
Common signs are unexpected invoices, fragmented procurement channels, discrepancies in contract agreements and a lack of oversight in spending.
Software for procurement and spend analytics helps centralise procurement, monitor spending and enforce compliance.
Make the official procurement process user-friendly, clearly communicate the benefits and ensure management support.
