cost savings in indirect spend
TRANSCRIPT
Cost Savings In Indirect Spend
SYNOPSIS
• INTRODUCTION
• WHY INDIRECT SPEND IS A CHALLENGE?
• TAME YOUR INDIRECT SPENDS WITH THESE MEASURES
• CONCLUSION
INTRODUCTION
• If your procurement organization is not managing your indirect spend, then probably you are missing out on a significant source of cost savings!
• Although indirect spend represent a smaller percentage than the direct spend but it does hold a lot of potential for savings.
• Indirect spend consists of all the materials and services that businesses need in order to operate. In that context, marketing and other professional services like travel, IT, HR, facilities, utilities as well as the basic consumables like paper, paper clips & other office supplies falls under the indirect spend category.
• So the question now is that despite of being necessary commodities, how to tackle with such expenses?
• Why Indirect Spend Is A Challenge?
• Well, why indirect spend management is a challenge is ambiguous? Read on!
• Maverick spending or non-contractual spending that is done on ad-hoc basis is a huge contributor of indirect spend.
• Indirect spends are difficult to evaluate and are not subjected to indirect inspection which makes the quality measurement difficult, if not impossible.
• The indirect spend having smaller spend-average may go unnoticed. Purchases range over a wide variety of product categories & suppliers, the purchase volume is not necessarily large.
Tame Your Indirect Spends With These Measures• While managing the indirect spend is more challenging, the potential influence
on the business makes it worth the effort. Here I am mentioning some steps which you can start to bring those expenditures under control.
1.Assisted Purchase• This provision offered by Cormsquare helps substantially reduce the indirect
spend costs. All one need to do is to contact us and provide the information regarding the purchase, rest of the job will be done by our Assisted Purchase Executives. You can even negotiate with the suppliers.
2.Group Buying• Group buying is not a bad deal either when the attempt is to cut the indirect
spends. Nonetheless, the party has to make a smart decision after having contemplated the needs and goals of business!
3.Spend Categorization• It is recommended to categorize all the indirect spends under the standard set
of direct spend category. Improving procurement across indirect services categories offers significant opportunities for savings. However, data, tools & capability must be chosen carefully to meet the specific needs of these spend categories.
4.Spend Impact & Ownership• An important precondition to consider is to determine the presence of at least
one budget holder for whom there is something at stake.
5.Category Strategy• Applying coordinated procurement practices on Non Product Related (NPR)
yield quick savings and efficiency but is not achieved by mere pooling the volume and implementing the international frame agreements for all spend categories.
6.Invest In eProcurement Technology• Make the investment with automated transaction classification capability.
eProcurement solutions are capable of automatically analysing and classifying the transactions using the user’s free word item search items.
7.Network And Benchmark• Grow your network with procurement teams in other companies to understand
which indirect categories and which specified supplies they have succeeded in moving toward more organized competitive sourcing and spend management disciplines.
ConclusionIndirect spend is a substantial proportion (up to 50 percent) of a company’s purchases and significant improvement can be made in the indirect spend portfolio by consolidating, standardizing and outsourcing indirect items of spend to reduce costs and lift the service levels!!
CormSquare is cloud based procurement platform targeted for small and medium enterprises (SMEs) and bulk purchases. CormSquare is native end-to-end procurement software with private market. CormSquare automates procurement process, greatly reducing time. It also helps find right suppliers at lower price. CormSquare saves procurement cost and ease of procurement.
www.cormsqaure.com
Our Customer Relationship Officers (CROs) can assist you with finding suppliers, supplier competency assessment and supplier audit. Based on your requirement, our relationship officers can find local, national or global suppliers.Our Customer Relationship Officers (CROs) can assist in raising RFQs, RFIs, receiving quotes, compare technical and commercial quotes, purchase order management, delivery/document tracking and payable processing.Our Customer Relationship Officers (CROs) can analyses your procurement data and provide actionable intelligence.
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• Assisted Purchase – buyer receives customized quote from cormsquare’s procurement professionals.
• End to End E-Procurement Suite on cloud, that helps buyers in managing enterprise purchase.
• Seamless Responsive Interface which works across devices. • Digital B2B Store front for supplier with digital catalogue, ePayment and
eProcurement Services • Mini CRM Tools and Digital promotion assistance to our stakeholders. • Collaboration with supplier to assist in Customer acquisition, engagement. • Helping manufacturing and Buyers to master the transformation of their business.
Contact Us
Contact: +91 9108992330, 080- 4165 5407 080- 4204 9707
www.cormsquare.comwww.facebook.com/cormsquare
Regional Office #131, 2nd Floor, 7th Main, JayaNagar 4th Block, bangalore – 560011.
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