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August 3, 2017
How your organization can move to strategic procurement?
Frederic Portal, Ataway Director of Alliance and Strategy
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Procurement departments spend a lot of their time understanding business needs and building partnerships with suppliers. Often there is no real harmonized global process and or focus on strategic sourcing and very often it is due to lack of people in the team, work load or time. In order to realize savings and work more efficiently with suppliers, organizations needed a streamlined global process as well as an automated procurement solution to support it.

Many professionals often confuse procurement with the tactical activity of purchasing. In fact, procurement goes far beyond just buying supplies, and the effects are much more far-reaching across the business. Procurement reaches across all departments and all products, enforces spending policies, drives pricing and determines product quality.

By aligning direct and indirect purchasing activities to spend, and by implementing quality policies across an enterprise, best-in-class companies deploying strategic procurement reduce costs by about 13%, according to research from Aberdeen Group.

It is not only for big organizations, small-to-mid size company, this adds up to big savings. Consider a company that spends $1 million annually on purchased goods and services. With best-in-class sourcing, the savings can be $130,000 per year. Spend $10 million annually, and your savings easily top $1 million.

For manufacturing company or consumer goods producer—spending 20 to 40 percent of annual revenue on procuring parts and raw materials is not unusual. Saving 13 percent on these large outlays translates into returns that dramatically add to the bottom line—and that are simple enough that you can calculate the ROI.

How your organization can move to strategic procurement?

Many organizations are moving to cloud applications to reach strategic Procurement, it’s not only for the usual benefits of the cloud (access to innovation (regular updates), low monthly costs, lower cost of ownership, etc).

As you look to move to strategic procurement or to increase the amount of negotiated spend it is important to have easy-to-use tools for everyone involved in the sourcing process. Oracle Sourcing Cloud simplifies the process by guiding you step-by-step through a negotiation. As a result, you can reduce the negotiation cycle time and realize savings more quickly. You can tailor the negotiation to your organization's needs, leverage information from past events, and use social collaboration tools with individuals from across your organization.

Sourcing excellence requires combining the specialized skills of procurement professionals and subject matter experts by leveraging their expertise and gathering feedback. Online collaboration makes it easy for experts in specific areas to lend their expertise to the sourcing process.

Oracle Sourcing Cloud automates combining different scores from team members and brings additional transparency to the team scoring process for better results. Suppliers also benefit from an intuitive user interface so they can quickly engage and respond to negotiations. Suppliers are provided with a comprehensive overview of sourcing activity that makes it easy for them to take action. By reducing the effort to train suppliers you can focus on what’s important: getting the most value for your organization.

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Key Benefit of using Oracle Sourcing Cloud

• Lower costs
• Collaborate for better results
• Enhance negotiation strategies
• Streamline supplier negotiation process
• Drive competitive behavior from suppliers
• Minimize training and ongoing support
• Determine best award decisions

 

Oracle Procurement Cloud helps organizations streamline, standardize and automate their source-to-settle process through modern technologies that help increases influence over spend and procurement practices. It increases user engagement, increases collaboration and simplifies, standardizes and automates routine transactions resulting in lower costs and higher margins.

Interested in learning more about how you can take advantage of Oracle Procurement Cloud , or are you looking for some help on defining your cloud strategy to support your digital transformation? The Ataway cloud team is here to help you and make your digital transformation a success. Consider talking to one of our local Ataway offices. Ataway has worked on several Cloud activations and can help you. Consult with Ataway’s team of experts today to learn more or send us an email: experts@ataway.com . 

 

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