Requisitioning and purchase orders for preferred suppliers is considered managed spend. The more spend you can manage, the more savings go directly to your bottom line. Requisition of goods and services left up to employee discretion is considered unmanaged spend. You'll gain better control of your bottom line by understanding and acting on differences in spending.
Cost conscious organizations try to convert unmanaged to managed spend in a number of different ways – using centralized purchase teams, inventory items and paper approvals to name a few. To get better value from suppliers you'll need to create a supplier network and collaborate in a way that goes beyond just negotiating price. Companies in a collaborative supplier networks receive better overall terms by being very important to a few suppliers rather than unimportant to many.
How do they do it? Successful companies manage their spend with the help of automated purchasing systems. An especially helpful purchasing system provides your employees with easy to use, controlled shopping on suppliers websites. cXML is an industry standard connector that will allow your employees to punch-out (single sign-on) to a suppliers website directly from your purchasing software system.
A cXML connector allows your preferred suppliers to display your contract pricing and preferred items on their website. Your employees can create a shopping cart online for products they need, whether it's from Dell, Office Max, Home Depot or other industry specific suppliers. Once the shopping cart is full and the employee checks out, their shopping cart automatically creates a requisition in your purchase system instead of just spitting out an invoice.
The Ariett ReqNet system helps companies manage spend quickly and easily without paper or re-keying of data. An employee can submit an automatically created requisition to their manager for approval and budget checking. When approved the purchase order is immediately delivered to your preferred "punch-out" supplier using the cXML connector and you never have to re-enter the order. You gain control and visibility, your item catalogs and pricing are kept up to date by your supplier, and you save time and money because your team does not need to maintain item lists and pricing in your internal systems.
Not only does this save time, improve the morale of your employees and increase productivity, but it will also make your suppliers part of your team. By managing spend you can focus your purchasing power and gain the leverage you need to negotiate with suppliers for the quality and pricing you want. Using cXML punch-out also provides you with purchasing data in your purchasing systems so you can analyze purchasing trends to keep overspending in check.
Managed spend utilizes sourcing techniques, purchasing systems, and spend analytics to ensure long-term and sustainable value. And the biggest benefit of all? You take control of your bottom line!
By Ariett, a Purchase and Expense Solution Provider out of Massachusetts