A Review of "Spend Visibility: An Implementation Guide"
Now that the holiday season is behind us, I am finally starting to get caught up on some industry publications that have hit the market recently. Of course, Managing Indirect Spend, Enhancing Profitability Through Strategic Sourcing should be on everyones reading list… but I digress. No, the real thing I wanted to talk about today was the recent FREE whitepaper Spend Visibility: An Implementation Guide (pdf), compliments of Michael Lamoureux, PhD (the doctor) and Bernard Gunther; sponsored by Lexington Analytics.
So admittedly, this PDF whitepaper has been sitting on my virtual desk for over a month now, as it is a very comprehensive (in other words, long) 134 pages. In fact, it very much has beginning makings of a decent book if they had just sought out a publisher, (like yours truly did recently). But once I finally committed to reading it, I found that it is actually a very worthwhile read that really deserves some attention outside of the doctors blog. In fact, even if you are short on time, there are enough quotes, examples and tips to keep you coming back to digest more.
From an elevator view, the report discusses a problem (or opportunity, depending on how you look at it) in which most strategic spend visibility initiatives really only are successful in driving short bursts of short-lived savings, or quick saves. The Executive Summary argues that most initiatives and visibility exercises only produce short term blips on the bottom line and are unsustainable in the long term. We happen to agree with this at Source One, we are frequently told by some of our customers that they just sourced a category and that there are no savings available, yet we are able to produce both additional immediate savings as well as develop programs to help sustain or improve those savings beyond that first year of the contract.
The report starts with some strong citations from notable resources such as Aberdeen, IBM and Hackett Associates. It basically outlines the strong savings opportunity (estimated up to 11%) that is on the table for just about any spend category. It also details that by simply adding the process of reporting and viewing your spend carefully that an immediate savings can be found through areas such as incorrect item numbers, improper pricing, demand shift and maverick buying. However, the report demonstrates graphically the rapid decline in sustainable savings after the low hanging fruit has been identified and the first year or so of compliance has been tracked and monitored.
Tags: Industry Publications