What’s the number one priority for procurement teams everywhere? Reduce Spend. In this blog, we will show you how Canopy does just that.
Procurement teams need to be able to direct where and how enterprises spend their money. That’s particularly difficult at a time of rising prices. Right now, severe geopolitical and trade risks remain at the forefront of supply chain disruptions, making them still vulnerable to inflation. But as well as controlling spend, procurement needs to work within its own tight budgets. Indeed, now more than ever, reducing spend is the number one priority for procurement teams everywhere. In this blog, we take a closer look at how Canopy can deliver that spending reduction and show a three-fold direct return on investment in the first six months of deployment.
Keeping procurement costs under control
Procurement sits at the forefront of innovation, sustainability, and social responsibility. But ultimately, procurement is about supplier management, so that its organisation can compete on price while being agile enough to cope with supply chain disruption. And it’s got to ensure that it manages suppliers in such a way that it can keep its own costs under control.
Canopy can help. We have quantifiable results of the spend reduction we’ve achieved for our clients. One of them, Unispace, the office design and build organisation, conservatively calculates that Canopy has secured a 42% reduction in the overall cost of supplier management. So how have we done it? Here are three key areas where Canopy saves you money through spend reduction:
1. Tackling administrative costs
It's costing you real money to maintain manual processes. Procurement needs to take steps to eliminate the administrative costs of supplier management, from the start of the supplier lifecycle onwards. Onboarding processes are incredibly time-consuming, often with manual processes for the transfer of data contained in new supplier forms to downstream systems. It’s often highly skilled members of staff who are spending their time doing this burdensome admin. As with any manual process with lots of human intervention points, it's open to error. And it can be difficult to keep a dynamic view on supplier data beyond onboarding, raising the risks that you’ll be dealing with non-compliant suppliers.
Canopy reduces the level of administration involved in capturing and sharing supplier data, which can often be unwieldy without a single platform to manage it. Canopy automates processes, getting suppliers themselves to ensure all the data you hold on them is correct. Anna Williams, Global Procurement Director at Unispace, told us that they have managed a 71% saving in administration costs of the Finance Team by deploying Canopy.
“We had highly skilled members of staff spending precious time doing admin jobs. And commercial teams maintained their own supplier databases. By not having a single system that allowed us to have supply chain data visible, there’s been a burden of admin falling across the entire business.” Anna Williams.
With Canopy, you can free up time, allowing your procurement team to focus on strategic decision-making and high-level initiatives such as risk mitigation and governance assurance.
2. Understanding your supplier base better
Not being able to see all your supplier data is raising your costs. Too often when supplier data isn’t visible across a business, commercial teams maintain their own supplier databases. By not having a single system that allows for supply chain data visibility, it’s difficult to classify and categorise suppliers and their spending accurately. Why onboard a new supplier every time you need to do something when you have a perfectly good supplier who has performed well already on your books?
“I need to be able to search my database of suppliers quickly and have good categorisation. And importantly, in an increasingly legislative and disrupted world, I need to know if the supplier has met our required levels of compliance in each of the 18 countries we operate in and how much risk they will expose us to.” Anna Williams
Canopy helps you identify spend reduction opportunities within the wider supplier base. By understanding exactly what your suppliers do, you can properly categorise suppliers. It’s also essential to know how exposed your suppliers are to risk; Canopy allows you to classify them accordingly. And since there’s a direct link between your supplier and their data, you can be confident that the data is accurate.
3. Building deeper supplier relationships to reduce spend
Do you really know enough about your suppliers? Many procurement teams using traditional methods of supplier management simply can't properly see how they're working with their suppliers. If you don't have a proper handle on the commercial terms you have with existing suppliers, you’re not going to get the best out of them. But suppliers have a choice about which organisations they will supply to, so you need to make yourself attractive to work with. And if you’re not a supplier of choice, you’re going to have to find a new supplier.
“Too often, procurement does not have access to the right platform to get the information we need. That’s what I’ve done with Canopy. It allows me to take stock of each supplier relationship. It’s great to have the spend level at my fingertips, so I can take a view on category diversification and build better supply chains.” Anna Williams
With Canopy, you can build deeper relationships with your most solid suppliers across your supply chain. By concentrating spend within the existing supplier base, you can negotiate price reductions in supplier contracts and benefit from economies of scale. And by being able to identify high-performing suppliers, you’ll be able to negotiate better terms and explore partnership opportunities. What’s more, you can see a three-fold ROI on the cost of Canopy in the first 6 months.
LISTEN: In a recent episode of the Procuretech Podcast, host James Meads is joined by Anna Williams, Global Procurement Director at Unispace, who discusses her successful implementation of Canopy.
READ: You can read our full case study with Anna Williams, Global Procurement Director at Unispace.
To find out more about how the Canopy supplier management platform can save you money, contact one of the team today.
Post by Nick Verkroost
Nick is an experienced business leader and the CEO for Canopy (OCG Software), the rules-based Supplier Management platform. Nick's focus is on commercial and operational excellence and ensuring our clients maximise the opportunities that Canopy offers.