Starting in October each year through mid to late December, Procurement team members and leadership are immersed in the annual budgeting and plans for the coming year’s projects. It’s not the most favored job responsibility, but it’s a necessary one.
It’s important that budgets connect with the overall business strategy, go-to-market roadmap, and financial and non-financial performance goals. And as the past few years and current conditions remind us, Procurement should also consider how economic uncertainties, unpredictable supply chain disruptions, and workforce challenges may factor into their planning.
Thanks to regular interactions with our clients, one of our great Customer Success Manager, Marie-Gersande Cormoreche, has collected tips from clients experiences. Based on her analysis, here are 5 best practices for Procurement teams to consider during this annual process – and how a solution for Procurement Performance Management (PPM) can help speed, simplify, and enhance the efforts and outcomes.
1. Spreadsheets: The bad habit we need to quit
That desktop app or Google sheet is just so tempting for individual team members to launch and start entering data, especially if that’s where the data currently exists or how it’s been done in the past. But the problems of using these tools are well known. You end up with multiple versions of the same file. You later are faced with 10 variations of the original ‘template’ after more people have saved and modified it to create their plans, and then someone has to resolve the differences and consolidate it all together. There is risk of data loss or corruption. It’s all very inefficient and error prone.
Instead, with a PPM solution, you have a standardized, central, and secure destination – built specifically for Procurement – where all of your team members can just as easily enter the information for next year’s projects as they could in these spreadsheet files. Now everything is transparent and uniform, and you get a single picture in aggregate and can drill-down to each project from there.
✓ Time savings
✓ Data accuracy
2. Are you leveraging what you’ve done in the past?
Many find themselves starting their plans from scratch every year, even if it’s a project that has history. You may need to hunt down the past information and go back and forth between multiple documents, contracts, and apps to integration the information you need to be reflected into your plan. This is also inefficient and may leave some knowledge behind.
A way to improve this is to use your contracts data as a great starting point for your next year’s budget, and to identify projects that have recurring expenses. A good PPM solution lets users find all this information in just a few clicks, all within the same platform, so that your team members can create new project from contracts for their plans based on this data.
✓ More robust plans
✓ Improved goal setting
✓ Reduced risk of cost savings left behind
✓ Cross-department collaboration
✓ Time savings
3. Does everyone understand the goals?
Once you have all the inputs collected for your plan, a key piece is to set your goals (overall and at a project level). The challenge here is that the goals aren’t always clearly communicated or understood by Procurement teams who have to work towards those objectives and the managing team who needs to measure actual outcomes. Those goals also should have consistency in how they are measured and connect back to the overall objectives for the year.
For users of Per Angusta, they have found that this is easy to handle with administrative features that can “lock” your objectives once validated. (Other PPM solutions may approach this in different ways.) Those goals should be clearly visible in Dashboards, which can be tailored for different roles within the Procurement team and in Finance as well. As you track progress, you can see how well the forecast is tracking against those goals and then what the actual outcomes were upon each project’s completion.
✓ Reduced risks to goals
✓ Improved forecasting and adjustments with Finance
4. The best-laid plans must adapt and discover new ideas
No plan ever executes at 100% accuracy. So, building plans means acknowledging that there will be a need to respond to new, unforeseen circumstances or if changes end up higher or lower than predicted.
Maintaining a strong pipeline of qualified project ideas and opportunities can provide excellent sources of new value that can be tapped when needed as the year progresses or if you’re short on your current-year objectives. Using Per Angusta, you have a centralized destination where such opportunities can be added, reviewed, and prioritized collaboratively – and then promoted to the actual plan at any time, once there is agreement and resourcing.
✓ Reduced risks to goals
✓ Improved resiliency and speed to handle changes
5. Procurement planning shouldn’t be « an island »
As your team builds next year’s plan, doing so without input and reviews from stakeholders may result in more challenges in the future – especially as it relates to priorities and goals. But the problem is how to best facilitate that transparency at the right time, in the right format, and with the right level of detail?
Having your plans in a PPM solution (like Per Angusta) gives you an easy way to invite your internal stakeholders to review your planned projects and adjust your objectives. You can direct them to the information most relevant to them, making it efficient to collect feedback through the tool. If you want to go further in your collaboration, we have the possibility create your stakeholders dedicated access to add in new ideas directly in the application, for future consideration
✓ Strengthened organizational alignment and cooperation
✓ Improved goal outcomes
The level of detailed work and frustrations surrounding your annual budgeting and plan-building in Procurement are likely only increasing as our global supply chains become more complex, new goals such as ESG are added, inflationary pricing and economic conditions fluctuate, and teams are under more pressure to do more with less. PPM solutions like Per Angusta can substantially ease this workload while also driving forward a better overall plan and goals, one that gets more buy-in across the business.
See it in action for your procurement planning: Our Per Angusta team can give you a 30-minute demo highlighting how we tackle each of the areas highlighted in this article (and more). And if you’re already a Per Angusta customer, contact our Customer Success team to walk you through where to find all these features.