Procurement departments have the opportunity to increase employee empowerment by simplifying processes, saving time, and ensuring the right materials are purchased. These benefits are accrued by putting more purchasing decisions in the hands of employees. It also removes an unnecessary bottleneck that can occur even with smaller purchases that become subject to detailed specifications and RFPs.
However, this needs to be balanced with the larger view of overall corporate spend management. Procurement needs to not only control and manage spend across departments but also establish spending policy guidelines for all employees. Many small-to-mid-size companies don’t have a purchasing policy but will need to come up with one as they grow. Without one in place, policies will end up varying widely across departments and locations, making it difficult for procurement to maintain a high-level view of spend across the company. It also makes maintaining compliance more difficult.
Purchases vary across departments and can range from spend on travel, recruiting, vendors, and even indirect spend on things like office supplies, repairs, maintenance, and operations.
All of these challenges can be managed with purchase policy programs, data analysis, and putting agreements in place that support what the business needs.
Technology can be used to set guidelines as well as enable visibility and communication. For example, Suplari can help procurement departments to enable a curation-based approach where typical purchase items are labeled as “preferred” (these items show up first in searches and are clearly marked) or “restricted” (includes messaging about why it’s classified as such). This makes it easier for procurement to decide which items fit best within the company’s budget and for employees to purchase them or stay away from items that are not preferred.
Another area where technology can help streamline the process is through utilizing a workflow system with a well-defined authorization purchase approval process. You need an automated purchasing system that can be easily implemented to replace the otherwise very manual approval process. Dealing with external vendors can become easier as well by using purchase order automation which makes creating one as simple as clicking through.
Visibility and analytics are also key to managing department spending. Data-wise, the more employees are empowered to buy items using an approved solution, the more insight procurement has into spend patterns and business needs. For good visibility, your purchasing policy must be documented but also communicated out regularly to remind existing employees and inform new ones. It should at minimum cover purchase approvals, purchase orders, and contract authorization limits.
By making sure the purchasing policy is clear and communicated frequently, purchase orders and approvals are automated, and visibility and data go hand-in-hand, procurement teams can better empower employees to make their own purchasing decisions.
Manage Your Purchasing Policy Better in 2020
Suplari can help track spend and streamline purchasing processes for better company-wide spend management. With customizable AI-driven Insights, a simple and easy-to-use interface, and the ability to gain 100% spend visibility – Suplari is the perfect solution for small teams with big goals. Contact us today for a demo!