10 SIMPLE QUESTIONS TO EVALUATE THE MATURITY OF YOUR PROCUREMENT ORGANIZATION

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INTRODUCTION

  • In today’s challenging environment, business leaders of financial services companies are consistently looking for ways to enhance profitability and deliver bottom-line savings. In their quest for profitability, Procurement can sometimes go under the radar of these leaders. Due to this, they may be missing out on tens of millions of dollars in savings every year that could be realized by establishing a strategic procurement function in the organization.
  • Historically, financial services companies considered procurement to be a back-office function. These companies have typically believed that procurement’s value is limited to completing transactional tasks such as creating POs and rubberstamping contracts. In fact, in a recent survey of C-Suite executives at financial services companies, Valorant found that this transactional, back-office view of procurement is still prevalent.
  • Valorant has helped financial services companies reimagine procurement by establishing best-in-class processes and tools. We provide tailored solutions for each client to help them achieve all their business goals.Typically, we start our engagements with a current state assessment as a part of which we evaluate the procurement maturity of the client and leverage our findings to design a future state that enables them to maximize value, reduce risk and fuel innovation.

Findings from a recent study have highlighted that most C-Suite executives at Financial Services companies are unaware of Procurement’s strategic benefits

of respondents highlighted they do not consider Procurement’s role to be strategic

of respondents mentioned that their organization does not have a formal Procurement function

  • Valorant has helped financial services companies reimagine procurement by establishing best-in-class processes and tools. We provide tailored solutions for each client to help them achieve all their business goals.Typically, we start our engagements with a current state assessment as a part of which we evaluate the procurement maturity of the client and leverage our findings to design a future state that enables them to maximize value, reduce risk and fuel innovation.

Ask yourself these 10 simple questions to find out how mature procurement is at your organization

1
Do you know how much your company is spending with all your third-party vendors?
2
Are you leveraging your collective purchasing power during negotiations with vendors? In other words, are you leveraging all your enterprise wide spend with vendors or are you negotiating each SOW individually?
3
Are all your supplier contracts stored in a centralized repository?
4
Does Procurement, Legal and the Business receive alerts 6 months in advance of when a contract is going to expire?
5
Do all your vendor contracts include the following clauses?
    • Termination for convenience
    • Termination Assistance
    • Data Ownership
    • Data Reporting
    • Limiting Automatic Price Increases
    • Insurance / Indemnification clauses
6
Does your company have KPI’s and SLA’s in all your vendor contracts? Does your organization actively monitor these KPI’s and SLA’s to ensure your vendors are meeting these KPI’s?
7
Have all your vendors been properly risk rated to ensure there are no potential security issues?
8
Does your company have standard RFP templates and negotiation toolkits?
9
Do you have benchmarking information for what is the best pricing in the market for your negotiations with your vendors?
10
Do you publish RFPs to multiple vendors for new projects and contract renewals or do you sole source with a single vendor?
  • If your answer to most of the 10 questions listed above is negative, or you are unsure of the answers, the Procurement maturity of your organization is likely to be low. This means the role of procurement at your company is highly transactional and you’re leaving a significant amount of money on the table with your third-party suppliers. A procurement transformation program can help evolve your procurement function to a strategic value creator which can not only reduce your third party spend, but also help contain risks.
  • At Valorant, our experience of working with financial services companies such as banks, insurance carriers, asset management companies etc. for years has demonstrated sustainable benefits that are not limited to bottom line savings

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  • Download full PDF report to know more about procurement maturity and the benefits of having sophisticated procurement at your organization

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