Is the tail wagging the dog regarding significant unmanaged spend?

Is the tail wagging the dog?

80% of the procurement effort on only 20% of the spend. Is it too small to worry about, or something that requires attention?

Tail Spend is the untapped area of procurement and yet it can be the easiest to manage and gain benefit from efficiency, cost avoidance, savings and income from better discounts, P-Card and VAT rebates. So why not have the freedom to buy and the power to control.

 

Figure 1: £ Value v # Transactions 

Given, that if you add all the tail suppliers together you have one of your biggest suppliers with significant unmanaged spend, it certainly should be the focus of attention.

We think the dog should wag the tail! Effective management will deliver real benefits in terms of increased control and efficiency, enabling compliance, delivering savings from economies of scale, reducing maverick spend and generating income!

But how can we do this when resources are limited, there are too many suppliers and the ERP does not enable processing of Tail Spend easily, causing buyers to bypass the standard processes.

After all, it’s easier to be maverick!

Is it in the too hard box?

 These are common complaints that the current complex approach to conventional Supplier Relationship Management and Sourcing does nothing to address. It seems that the effort to manage the tail is greater than the perceived benefits and it falls into the ‘too hard’ box.

"No one else bothers with compliance, why should I?"

"It takes 100 years to set up a supplier in our system"

"I need it now"

So what is the solution?

Well, you could throw more resource at the tail but is it sustainable; the tail will never shrink or disappear! Outsourcing is a consideration but maybe you want to retain control.

At Sopra Steria, we believe the implementation of QuickStart, our Tail Spend Management Solution is the answer. The freedom to buy, the power to control.

Sopra Steria’s QuickStart delivers a solution and service that enables full purchase-and-pay management of all corporate, one-time only, indirect and maverick spend.

QuickStart will:

  • Give you greater visibility and control of who spends “What When and How Much”

  • Maximise the return of your working capital

  • Increase the use of your credit card programme improving process efficiency and enabling rebates

  • Provide 100% HMRC accredited VAT/Tax compliant e-invoices from all your Tail suppliers with Line Level 3 detail on every transaction

  • Eliminate master supplier set-up and management of one off suppliers

  • Enable a cost effective way of buying from and paying ad-hoc suppliers

  • Adhere to the prompt payment code

  • Provide intelligently managed early settlement discounts, DPO and rebates

Why should I bother?

To enable you to gain control of your spend, and achieve control, compliance, efficiency and savings in one solution. Sopra Steria’s QuickStart is a plug and play cloud solution that requires no hardware investment, is 100% PO driven and enables trading with all card and non-card accepting suppliers, providing HMRC Tax/VAT level 3 line level details for every transaction.

Sopra Steria manage the solution for you, supporting your users through the process, and ensuring you get  the benefits from the service.

All this plus enriched 24/7 management information providing visibility and control.

Users enter their order using the Ordering Portal (or any other mobile device) and QuickStart manages supplier set up for you using the Vendor Portal.

Figure 2: "I want to buy"

(See below for a text version of this flow chart image)

The benefits: 15% to 20% savings

Figure 3:  Benefits for client and supplier

(See below for a text version of this client/supplier benefit image)

So who's wagging the tail now?

Why Sopra Steria?

Our solution puts you, the buyer, firmly in control, providing the flexibility to separate funding sources from the supplier payment mechanism. You could be delivering benefit in less than four months.

Make it happen!

For more information on Sopra Steria’s QuickStart Tail Spend Management or any of our other procurement solutions and service please contact us at info.uk@soprasteria.com.

 

-----------------------------------------------------------------------------------------------------

Description of I want to buy flow chart

  1. Customer says "I want to buy"
  2. Log into Sopra Steria QuickStart
  3. Use free text to find existing supplier
    3.1 No - QuickStart and supplier created record
    3.2 Yes - Order created
  4. Optional authorisation
  5. Send out order
  6. Amend order supplier / requester
  7. Optional authorisation
  8. Goods receipt and match to order
  9. e-Invoice generated from GRN
  10. e-Invoice paid

Description of benefits for client and supplier image

1. Client 

  • Ease of use improves compliance
  • Support for rapid one-off purchases
  • Reduce transaction cost
  • Adherence to business rules
  • Increase VAT rebates through level 3 data compliance
  • Full visibility and control
  • Improve vendor management
  • Available across mobile devices

2.  Supplier

  • Guaranteed payment schedule improves cash flow
  • Touchless processing
  • Ease of use enables rapid delivery of services
  • No joining fee