Putting off the inevitable
Are you putting off getting a procurement diagnostic? To me, doing so is similar to putting off all-important health-check appointments. Going to the Dentist is, for me, just one of those things I will put off for as long as I can. I’m not alone, either. Over a third of UK residents choose to put off dentist appointments. I know it’s just a checkup, I know it will help spot and catch any problems early, I know it’s perfectly sensible. I just don’t ever get around to it.
Fear of the unknown can often account for people putting off important tasks. Once completed, we wonder why we didn’t do it sooner. Getting unbiased advice from an expert is vital in any walk of life, whether in healthcare or business.
Having a fresh pair of eyes, especially an expert pair of eyes, to complete a quick check nearly always brings benefits. Sometimes that benefit might be the reassurance of “you’re fine”. However, at other times, it’s the feedback that there is something that could be improved or sorted that’s valuable. Half the time, we know something’s up but don’t quite know what. Having an expert view can lift the fog and provide focus on the actions you can take.
Why is procurement so hard to get right?
Procurement is no different. The goods and services purchased by a business can represent 70 per cent of a company’s total costs. Not only does this mean it has a significant impact on your profitability, but it also means it’s a source of risk.
Don’t underestimate how vital procurement is to not only yourself but the economy as a whole. In 2015, the UK’s public procurement market was valued at over £260 billion.
It’s challenging and time-consuming to dig into your procurement activity. Working days are always busy, with a variety of demands on the people in your business; it can be hard to find the necessary time to put aside. That’s why getting an expert to do that all-important procurement diagnostic and provide you with honest feedback on the condition of your business is invaluable.
Is a procurement review the answer?
Through a short procurement diagnostic, you will be able to find out whether your supply base is right or whether there are better opportunities, such as changing the mix of suppliers to reduce cost or risk. You will be able to find out whether your process is working effectively or if your team is tied up with repeated annual activities to order, receive and match invoices. You will be able to understand to what extent your Terms and Conditions and your contracts are working for you. You could discover that there are ways to improve cash-flow through changes to payment terms or invoice financing. You will also get insight into supply chain risks and whether your mitigation plans are working.
For many businesses, this insight is indispensable. So, why not get a quick checkup of your procurement activity and spend? It’s certainly not as nerve-wracking as a trip to the Dentist, and the outcomes could help you act to boost profitability or reduce risk.