It All Adds Up in The End

Procurement Processes All Adds Up in the End

Procurement processes are designed to focus on the high risk, high cost, and high-volume deals associated with strategic initiatives or mission critical supplies. These processes are designed to safeguard the brand value, growth strategy, market commitments, and leadership commitments. While procurement and corporate legal teams do everything possible to keep large organizations aligned to goals and standards, many departmental, division, or individual purchases fly under radar because they do not meet specific risk, volume, or cost thresholds.

These stealth purchases get labeled various terms based on specific circumstances:

  • Departmental Spend
  • Tail Spend
  • Spot Buying
  • Maverick Spend
  • Rogue Spend

But regardless of the specifics and the label applied, it all adds up in the end. It’s time to find ways to align this varied and broad spend bucket to corporate goals and provide leadership transparency to better understand how this spend can be leveraged to achieve environmental and social goals.

There are many reasons why an employee or manager would want to keep a purchase within the approved and allocated budget categories below a formal procurement review. The potential for additional discussions, meetings, and process can feel like a slow-down, but self-service catalog purchase options from goal-aligned vendors, especially diverse vendors, can provide the ability for department or manager control without the time and expense of a more formal procurement process. With increasingly challenging goals set for corporations it’s key to better understand, track and drive goal-alignment within these high-volume, low-cost purchases.

Employees making decisions at the project, department, or division level are not always in a position to recognize missed opportunities to increase buying power with a preferred vendor. Sending all purchases through procurement doesn’t scale and can result in slowing down the purchases which merit thorough procurement engagement and support. You never want your procurement unable to properly vet, process, and negotiate those critical purchases because they are overwhelmed by the large volume of smaller goods and services requests.

The key is to make goal-aligning spending easy and the path of least resistance while also communicating clearly and regularly about the spend goals, the current progress toward those goals, and what individual decisions help contribute to accomplishing those goals. Three key things that will help align the high volume; low-cost spend: communication of goals and progress, simplified self-service catalog purchasing, and visibility of division, department, and project contribution to goals.

  • Visible Goals – Never underestimate the power of providing clear communication of the goals and the intent and the need to reiterate that message with updates and progress reports. Keeping the long-term strategy environmental and diversity goals top of mind will go a long way towards making sure urgent, tactical decisions contribute towards goal progress on a day-to-day basis.
  • Catalog Purchasing – When the right thing or best outcome is also the easiest and fastest option, it is quite simple to get individuals to pursue the desired path. The time invested in setting up catalog purchasing for things often bought via expense reports or as miscellaneous project or department purchases will benefit the entire organizations spend tracking achievement.
  • Dashboard Transparency – The ability for individuals with the power to make these high volume, low-cost purchases to see how their buying decisions impact the overall corporate spend goals is important. This is a form of soft accountability that allows decision makers to help move the spend need toward the overall corporate goals, not through a formal audit or compliance review of department and project spend, but through visibility and alignment.

Gainfront provides a modern and flexible procurement platform that allows for targeted solutions to address your immediate pain points. Our solutions include features designed to improve collaboration and alignment internally and with suppliers, simplify goal-aligned purchases though catalog buying, and increase visibility with up-to-date reports and dashboards.  Learn more about Gainfront capabilities here.

As corporate environment, social, diversity spend goals continue to play a key part of maintaining the corporate brand identity and value, it’s important to find opportunities to track, manage and accomplish those goals. Gainfront can help all of your spend, regardless of what you call it, add up to success.


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