Hot Tips: Purchasing
Six Steps to Procurement Optimization
- By Tom Fitzgerald
- January 1st, 2016
There’s an obvious connection between supply chain efficiency and financial sustainability. Here are six areas critical to helping colleges and universities optimize P2P operations:
It all begins with data. Make sure you have a solid handle on analytics/data across the entire enterprise. Quality data is the foundation for any successful procurement organization.
A defined policy must be established to ensure your procurement organization is strategic in its sourcing efforts. This policy must be adopted cross-functionally across the entire organization.
Are you staffed adequately and do you have the right people in the right positions? It’s important to review staff expertise levels and conduct a skill-level assessment to identify gaps or overlaps in these resources.
Look closely at the operational design and organizational structure of the procurement function. All things must be aligned so that people, process and technology are optimized toward efficiency.
5. Technology Adoption
This includes p-card utilization, P2P automation and e-commerce initiatives. An effective e-procurement system can significantly improve process efficiencies by eliminating paperwork, expediting contract fulfillment and controlling compliance.
6. Monitoring and Controls
Institutions must identify ways to monitor and measure these efforts in order to determine ROI. This ROI should be benchmarked against business objectives to drive cost containment, revenue enhancement and performance metrics management.
This article originally appeared in the January 2016 issue of College Planning & Management.
Tom Fitzgerald is CEO of E&I Cooperative Services, the nation's premier purchasing cooperative serving the needs of education. He can be reached at email@example.com.