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Is Your Spending Proactive or Reactive?

Is Your Spending Proactive or Reactive?

B2B Buyers continue to be more empowered, making bigger decisions and breaking away from slow, impersonal and inefficient processes to personalized, buyer-friendly ones. In fact, at this time, nearly one-third of buyers are purchasing outside of the approved procurement process and buying direct whenever possible. While this has some benefits, it poses many risks ranging from noncompliance to waste to fraud.

Unfortunately, looking at both the procurement function as a whole and the modern empowered buyer, you will notice a few trends that appear to leave neither procurement department nor end user satisfied:

Procurement Groups Cracking Down on Direct

Corporate procurement’s job has long been helping streamline processes and sourcing the best products at the best price. However, in today’s digital economy, the formal procurement buying function has come to be seen as slow and inefficient from the standpoint of business end users.

Forrester finds that while buyers are attempting to take control, procurement departments are ramping up enforcement activities, rather than creating an environment in which buyers can purchase in-policy items more easily:

“Procurement groups have reacted to the emergence of easy and efficient direct online buying options by controlling, not liberating, their colleagues. Forty-one percent of end user buyers indicated that procurement policies have become even more stringent in recent years.”

Buyers Ignore the Crackdown

All of this extra effort on the part of procurement groups isn’t going unnoticed, it’s getting ignored. The B2B end users are looking for products to suit their needs at a time that suits them, on their own timeframe. Per Forrester:

  • B2B Buyers will buy what they need despite policies: Seventy-six percent of organizations surveyed said they have an approval authorization procedure in place; 57% said they have reimbursement policies; and 47% said they have approved supplier lists that buyers can leverage. In spite of the policies in place, 30% of respondents said they are not concerned about the procurement policies at their organization and will buy the products and service they want anyway.
  • B2B Buyers Will Find Their Way around Reimbursement Policies: 50% of business end user buyers do not see reimbursement policies as being a significant barrier to them making online purchases on their own. Similarly, a third of respondents said approval/authorization procedures are not a barrier.

These two trends combine to create a tense environment in which both sides continue to fight against each other, when in fact they can work together to satisfy everyone’s needs. It takes work, it takes a proactive approach, and it takes a bit of work, but you can have the best of both worlds—a time in which buyers get what they need and procurement departments

The Best of Both Worlds: Proactive Procurement

While buyers eschew procurement edicts, there is a way to get the best of both worlds: Through a proactive procurement strategy that makes it easy for end users to select what they need and procurement leaders to still get the control and negotiation position they deserve.

Luncheon Series: How to Revolutionize AP Spend Management

You’re invited to join us for lunch to learn how companies like yours are using technology to gain visibility into their data to proactively manage spend. At this informative session, you’ll discover:

  • How shifts in employee purchasing behavior impact your AP department
  • Why this behavior could be costing your organization
  • How you can connect systems and processes to gain visibility into your all of your employee spend, no matter where it happens

Want to learn more about optimizing your AP process? Join our parent company, Wipfli LLP, at one of two upcoming luncheons on revolutionizing your spend management with efficient, accurate, and control-focused technology from Concur. Join Wipfli and Concur in Milwaukee (Brookfield), WI on August 23, 2017 or Chicago on September 19 or 20 (details to come) for “How to Revolutionize Spend Management.”

These events are now over, contact us to learn more!


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