To make informed decisions, Chief Procurement Officers should consider three things:
- Compliance to contracted spend
- Price variance: Do prices for the same goods vary widely from country to country?
- Trends: Are prices drifting, increasing, or fluctuating?
Of course, monitoring all of these factors requires deep visibility into the procurement operation—a significant challenge at many organizations where excessive paper handling, approval bottlenecks, and conflicting data from disparate systems inhibit effective procurement resourcing.
CPOs will ultimately be evaluated on their ability to reduce costs and consolidate the spend to fewer suppliers. The good news is that today’s technology enables them to do that more easily and cost-effectively.