How do you cut costs in an uncertain market?
Deloitte’s latest procurement survey finds that cost reduction is an “unrivalled focus” for businesses looking to expand in an uncertain market. How do property companies generate competitive advantage through procurement?
Seventy-nine per cent of chief procurement officers surveyed by Deloitte identified cost reduction as their top business priority, followed by risk management (57%), new products or market expansion (52%) and boosting cashflow (48%).
But the Deloitte Global CPO Survey 2017 finds that leading procurement practice can be defined by the “war for technology”.
“Our experience suggests a low awareness of emerging technologies and a lack of skills to deliver solutions using those technologies,” the report says.
Deloitte also found the main barriers to the effective application of digital procurement are data, people and systems.
“The traditional payment process can be laborious for both vendors and property managers,” says Yardi Australia’s regional director Terry Gowan.
“Submitting and cross-referencing paper invoices, securing approvals, creating electronic fund transfers, and taking payments to the bank – all these activities breed opportunities for errors and delay,” Gowan says.
Deloitte found that 87 per cent of organisations faced a “disruptive incident” with suppliers in the last two to three years, and that risk is the second most important priority for CPOs. Procurement risk is at its highest ever level, increasing to per cent in 2017.
Gowan says digital solutions, such as Yardi’s online management solution VENDORCafé, can eliminate disruptions and reduce risks by helping vendors to “self-service”.
“VENDORCafé accelerates the invoicing process for vendors, while reducing printing, mailing and storage costs for property managers,” he says.
Iris Esguerra, Yardi project manager and information technology business analyst for developer Grubb Properties in North Carolina, says VENDORCafé “eliminated the frustration” previously experienced by vendors and internal staff.
“Before, vendors would reach out to our staff to get updates on invoices. Now that vendors can follow their invoice online through the payment process, we have seen a visible increase in efficiency,” she says.
“VENDORCafé gives our vendors confidence and security that their invoices won’t fall through the cracks and they’ll get their money faster.
“The system even issues alerts when a Certificate of Insurance or other required information is missing or incorrect. The amount of time saved by our staff and paper eliminated is immeasurable,” Esguerra adds.
Gowan says advanced procurement teams have a “comprehensive digital strategy” that is “predictive, proactive and automated”.
“This can help companies drive new value – whether that’s new products, new platforms, or expansion into new market,” Gowan concludes. Learn more about VENDORCafé.