Managing Indirect Spend? Slash costs and Save upto 20% of indirect cost
Across Industries, specifically utilities and process industries, because of their capital intensive environments, typically spend a substantial amount on indirect procurement, especially services. Typically services account for more than 60% of the indirect spend for companies in these industries yet this area has remained unexplored for either automation or transformation efforts.
The Services Supply Chain comprises of unique and complex activities. This is then the reason why streamlining the process coupled with adequate systems support can lead to a large savings in this area. But how do we really go about it? Our experience tells us that this is definitely possible and is a huge opportunity for savings. Oracle Advanced Procurement Suite with its Services Procurement processes help organizations in streamlining processes in achieving these savings.
A Process driven approach coupled with the requisite functionalities within the ERP products would help align the ERP to play a big role in helping unleash the power in the services procurement processes.
The challenges seen in the service supply chain are primarily Lack of Spend Visibility, Lack of Process Control, Process Complexity due to Varied Procurement practices and processes and Poor Collaboration.The savings can be derived through streamlining existing manual and fragmented services procurement and management processes helping drive process transformation for overall services Supply cycle.
So though the services supply chain is very complex in nature, therein lies opportunity for significant improvements. A typical process transformation can yield savings of 10-20% of the costs in this function which can significantly improve the companies bottom-line. The other benefits also include increased contract compliance, enhanced quality and timelines of information on services and bring disparate spend categories, business units, people and systems into a common vision.
Realizing these benefits however required a holistic approach and strong integration of a number of operational and financial processes and systems to be successful in achieving the end results. So why is everyone not focusing on earning these savings?
