How to Tackle Maverick Spend?....
Maverick spending by non-procurement employees is the biggest challenge relating to indirect procurement, but purchasing professionals are divided on how to address it, according to the latest market intelligence survey conducted by Supply Management and Expense Reduction Analysts.
According to the survey The dangers of tackling indirect cost and tail-spend, seventy-one per cent of respondents said that a lack of oversight of what employees, with purchasing power but outside the procurement function, spend in a range of categories. But respondents were split on the best way to tackle the problem. Just over a third (34 per cent) said non-procurement professionals must be trained in procurement processes and 16 per cent said the number of suppliers should be consolidated.Almost one third (31 per cent) of respondents from public and private sectors said control of indirect spend should be handed to the procurement function to solve the problem, even though indirect costs appear to be the shared responsibility of a number of different departments within the respondent organisations.
Many of the other challenges in relation to indirect procurement are linked to maverick spend and stakeholder management. Nearly half (46 per cent) cited misclassified items and poor reporting as a challenge, 45 per cent say little understanding exists of where indirect spend lies and how much it covers. And 49 per cent say lack of ownership by stakeholders is a problem. Again, respondents were split on the best way to increase the influence and profile of procurement in the organisation. Nearly half (47 per cent) of the 360 people surveyed said a higher status in the boardroom would help, 42 per cent said procurement needs better oversight and reporting metrics of departments’ spend and 36 per cent said more training should be available to stakeholders. To see more...
According to the survey The dangers of tackling indirect cost and tail-spend, seventy-one per cent of respondents said that a lack of oversight of what employees, with purchasing power but outside the procurement function, spend in a range of categories. But respondents were split on the best way to tackle the problem. Just over a third (34 per cent) said non-procurement professionals must be trained in procurement processes and 16 per cent said the number of suppliers should be consolidated.Almost one third (31 per cent) of respondents from public and private sectors said control of indirect spend should be handed to the procurement function to solve the problem, even though indirect costs appear to be the shared responsibility of a number of different departments within the respondent organisations.
Many of the other challenges in relation to indirect procurement are linked to maverick spend and stakeholder management. Nearly half (46 per cent) cited misclassified items and poor reporting as a challenge, 45 per cent say little understanding exists of where indirect spend lies and how much it covers. And 49 per cent say lack of ownership by stakeholders is a problem. Again, respondents were split on the best way to increase the influence and profile of procurement in the organisation. Nearly half (47 per cent) of the 360 people surveyed said a higher status in the boardroom would help, 42 per cent said procurement needs better oversight and reporting metrics of departments’ spend and 36 per cent said more training should be available to stakeholders. To see more...