We are still reeling from the shock of Thanos destroying half of humanity with the snap of his fingers and we bet you are too. That got us wondering why it was so unsettling for most of us. Maybe it was because we underestimated Thanos’ abilities? Or maybe it was because we overestimated the Avengers’ abilities? We reckon it was a little bit of both – and since we are such Procurement geeks, we couldn’t help but draw comparisons.
On the Planet Procurement, the Titan capable of destruction does not go by the name Thanos, but by ‘Non-Compliance’. Being far more powerful than Thanos, he has the ability to bring down not half but the whole of your organization.
In 2015 66% of procurement professionals had said that a lot of work needs to be done to simplify supplier-facing processes (Source: Hackett Group report called ‘Improving Supplier Collaboration’.) It is now 2018 and Procurement departments are still ‘working on the simplification’ while the risks associated with fraudulent suppliers and illegal supplier processes have multiplied many times over!
According to another past Hackett report, companies lose an average of 8% of pre-negotiated savings due to non-compliant purchases. For instance, a company with $1 billion in indirect spend out of which 25% ($250 million) is noncompliant or maverick spend, loses 8% ($20 million) to unrealized savings. Scale this down to mid-market organizations with revenues between $200 million to $1 billion – you still lose millions of dollars to maverick spend.
While these are the risks in hard dollar values, there are others that can lead to a shutdown – if not total at least enough to cause a deep impact – of your manufacturing or distribution processes.
This raises the question – why do we even follow some compliant procurement practices if a downfall is imminent in the future? Why did the Avengers even try taking on Thanos when there was no chance they would win? And beyond those some compliant procurement practices, is there even a point to try and strive for 100% compliance? We are really interested in answering this question because it deals with procurement compliance through a fundamentally humane lens.
If this question interests, bothers, or amuses you – welcome aboard! We would love to talk to you on 30th May in our webcast titled ‘Return on Compliance: What It Takes And What It’s Worth To Implement Compliant Procurement’ in partnership with The Knowledge Group. We will be hosted by Richard Waugh, VP of Corporate Development at Zycus and Afzal Nasser, VP Global Procurement at Belden Inc. Designs for an informative and fun discussion on the many faces of procurement compliance and calculating a Return on Compliance (ROC), if there is any return at all that is.
Don’t forget to register using the code Zycus147490 for a complimentary seat on us! You can directly register here for the code to get auto-applied.
IDC Highlights Zycus AI: A Game-Changer in Procure-to-Pay Solutions
Discover why IDC, a leading global market intelligence firm, recognizes the transformative potential of Zycus AI Solutions in the procure-to-pay space. This video delves into how Zycus’s innovative technologies are revolutionizing procurement processes and driving efficiency in the Philippines and beyond. Watch the Video to Learn More!
We look forward to hosting you soon! Until then, watch out for the Titan named ‘Non-Compliance’. And here’s an interesting video for Driving Compliance Across Procurement:
