Outcome Driven Solutions

Reduce Maverick Spend

In the ever-evolving landscape of corporate Procurement, managing spend is a critical factor for controlling costs. Companies that want to enhance procurement operations, mitigate risks, and drive significant savings must pay close attention to how they optimize every dollar. One of the most pressing challenges in spend management is maverick spend; purchases made outside of established processes. It is an issue that introduces risk and increases costs.

Enter ServiceNow’s Source-to-Pay (S2P); a powerful solution that transforms how companies manage their procurement processes. By leveraging S2P, organizations can monitor compliant spend through approved channels and non-compliant spend otherwise known as ‘maverick spend’. The S2P solution allows procurement teams to provide employees with an easy-to-use ordering process, shorter cycle times, and better visibility into order status. Employees get a better overall experience while significantly reducing maverick spend.

The Maverick Spend Dilemma

Maverick spend, or unmanaged spend is defined as the “process of an employee buying a needed product or service without complying with the organization’s normal or prescribed process.” Employees who make purchases outside of established channels usually do this for one of two reasons: 1) The procurement process is complex and difficult to navigate (too much work for a simple order), or 2) The process is too slow (I need it now!) Employees typically see out-of-channel purchases as a solution to their problem – they get what they need when they need it.

This behavior, while well-intentioned, undermines the organization’s strategic sourcing efforts.

It leads to:

  • Increased costs: Purchases are made at non-negotiated rates.
  • Weakening of supplier relationships: Diluted spend lessens the company’s ability to negotiate favorable terms and pricing.
  • Additional invisible overhead: Employees spend time shopping and processing out-of-channel invoices can amount to hundreds of dollars for a single order.

Maverick Spend chips away at the savings and efficiencies that a well-structured procurement process can provide.

Enforcing compliance with purchasing policies creates a dilemma. Mandating that all orders be placed through Procurement typically overwhelms an already saturated channel. Your organization needs a fast, transparent, and easy-to-use solution. With a streamlined option, you can corral Maverick Spend – like attracting bees to honey.

ServiceNow’s Source-to-Pay: A Game Changer

ServiceNow’s S2P offers a comprehensive approach to managing the procurement cycle, with automation that streamlines processes from an employee’s request to invoice payment and all painful steps in between. Source-to-Pay excels in combining in-tool and out-of-tool processes into a seamless workflow. It provides end-to-end process visibility across all solutions in one place. With cross-platform connected data, it provides the intelligence to manage sourcing and procurement operations strategically.

Here’s how Source-to-Pay makes a tangible difference:

  1. Efficiency: Streamlined processes that are fast, transparent, and easy to use will enhance efficiencies and help corral Maverick spend.
  2. Increased Compliance: Real-time spend monitoring can identify purchasing compliance opportunities such as:Employees/Departments that have low complianceProducts that can be strategically sourced
  3. Workspaces: S2P offers targeted workspaces that organize and prioritize work for each team (Procurement, Sourcing, Payables, etc.) so the most important work gets completed first, enhancing overall responsiveness and team efficiency
  4. Data-Driven Decision Making: With S2P, organizations can leverage data analytics to identify trends, optimize supplier performance, and negotiate better terms. The insights derived from this data are crucial for continuous improvement in procurement processes.

How Outcome Driven Solutions (ODS) Can Help

To fully capitalize on the benefits of ServiceNow’s S2P, companies need expert guidance and implementation support. This is where Outcome Driven Solutions (ODS) can provide strategic guidance. ODS specializes in helping organizations seamlessly integrate and optimize their S2P processes, ensuring they achieve the maximum reduction in Maverick Spend.

ODS takes a comprehensive approach, starting with a deep understanding of your organization’s specific procurement challenges and goals. They’ll design a tailored implementation strategy that aligns the S2P platform with your unique business needs. From system configuration and process automation to employee training and ongoing support, ODS ensures that every aspect of the Source-to-Pay solution is fully optimized.

With a proven track record of delivering tangible results, ODS focuses on driving outcomes that matter—such as increased compliance, enhanced supplier performance, and substantial cost savings. Their expertise in change management also ensures that your team is fully onboarded and that the new processes are adopted smoothly, minimizing disruption and maximizing efficiency.

By partnering with ODS, your company can reduce Maverick Spend while having a streamlined, data-driven sourcing and Procurement function that supports your long-term strategic objectives.

Conclusion

In today’s competitive environment, managing spend effectively is a critical competitive advantage. ServiceNow’s Source-to-Pay platform offers a robust solution for companies looking to tighten their procurement processes and drive significant savings. By reducing Maverick Spend through real-time monitoring and increased compliance, organizations can unlock substantial value, enhance efficiency, and position themselves for long-term success.

Companies must adapt technologies into their operational fabric to move forward strategically. In doing so, they will reduce costs while fostering a culture of continuous improvement that will serve them well in the years to come.

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