PROACTIS: “Act Now to Keep Spend Under Control as Economic Uncertainty Continues”

WETHERBY, England, 11 August 2011

• Spend Control represents one of the strongest profit growth opportunities for the foreseeable future due to slow economic conditions, tight margins and intense competition that confronts virtually every industry, company, and organisation – this was one of the key themes that emerged in discussions by 120 senior procurement executives who gathered in Las Vegas, July, for roundtable debates led by PROACTIS.

• Top-line revenue and operating profit growth is easier to achieve during periods of economic expansion. It is during recessionary periods where Spend Control acts as a critical stop-gap in supporting company financial health. It represents one of the easiest and fastest ways for organisations to identify and reduce excess costs without risking the core business operation, eliminating staff or impacting end-user prices.

• "Organisations can capitalise on Spend Control initiatives to improve the bottom line and shareholder value without aggressively growing the top line,” said Simon Dadswell, Director of Marketing, PROACTIS. "It’s time for Procurement to show off its skills – define its role at the C-Level table and expand its strategic value to the organisation in order to affect business change.”

• At the roundtable debates, procurement executives discussed the changing attitudes towards cost management, the need to better align with Finance and the wider business, and how to bring more spend under management. In addition, the use of technology and process automation to support the successful implementation of change-focused projects was discussed.

• Now, before financial pressures intensify, is the time to put in place a true Spend Control framework. A framework that:

• Facilitates optimal pricing and supplier selection on a wide range of spend categories that result in savings

• Ensures all purchases are in line with corporate policies, established budgets and negotiated supplier agreements to avoid off-contract or "maverick" spend

• Manages the overall relationships with the supplier network to reduce the cost of transactions, improve collaboration and mitigate risk

• Streamlines Accounts Payable and Procurement so more activity can be handled without the need to add back-office staff just for administrative volume

• “You can put in place a standard eProcurement system to leverage your existing IT investments and get started in a matter of weeks,” continued Simon.

• To assess your current position, request “A Practical Guide to Identify Savings Opportunities” workbook from PROACTIS. It helps organisations explore three types of savings opportunities:

• Secured savings – where favourable terms of purchase are acquired through changes in pricing, mix, demand or quality and increased contract compliance

• Mitigated savings – delivered by an ongoing program of cost and risk avoidance

• Cash-releasing efficiencies – direct financial savings where money is chosen to be released from efficiency gains

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