3 steps to making sense of your data before a spend audit
As ethical procurement and shifting global conditions transform the supply chain landscape, spend intelligence is becoming vital to robust and resilient procurement. Gone are the days when saving was the only agenda item. Procurement professionals are firmly in the spotlight as guardians of company ethical, social, environmental and governance status — and that of every supplier in their network.
We have the technology: straight to an audit?
When you invest in smarter procurement software and tools, it can be tempting to jump into an audit that will unearth every potential issue and opportunity. But supplier relationships is a full-time job — and adding an immediate spend audit might leave you with a frazzled procurement team.
Here’s 3 things to consider before an audit on your procurement policies and supply chains:
1. Set the baseline
Joining those data dots to know your spend sparks new questions: what's contracted and what’s not? Categorizing spend in a unified platform unlocks where money is being spent at a more granular level. Categories are the fundamental building block for undertaking meaningful audits.
Dan says that without connecting those dots, there’s a limited chance to make a real change to spend.
“Without that initial data and creating some meaningful spend categories, there’s little chance of making any strategic moves that will move the dial on your procurement performance.”
“Look for a platform that enables you to do some retrospective category reporting — and that allows you to separate categories to minimize risk when diagnosing specific category issues.”
3. Get to know your suppliers and contracts
Integrating your data and starting interrogating your spend categories, and you have a better chance of getting actionable insights on your suppliers.
For established organizations, going back over each contract and reviewing the operations of each supplier is a daunting task.
But without the tools for comprehensive spend intelligence, you may be left open to overspending, reputational damage, legal challenges and loss of revenue.
No one has the luxury of starting from scratch
Startups with a clean business slate can implement due diligence and policies to only partner with ESG compliant suppliers from the start. They have a clear line of sight to ensure suppliers align with their corporate values and comply with contractual requirements.
For most organizations, it’s not that simple. With multiple suppliers, acquired over many years, that clear line of sight is lost — especially if suppliers subcontract work to shadow suppliers who won’t be on your radar.
“Shining the spotlight on your supply chain identifies opportunities and risk,” says Dan.
“The focus on spend reduction is changing. Companies are looking for ways to find out what's happening in every aspect of their supply chain. That’s what Robobai does — it surfaces that information and insights for your company to act on.”
Are you focused on what really matters in your supply chain? Download Robobai's latest whitepaper and discover the hidden truth in your supply chain.