Governance in procurement refers to the overall procedural arrangements and systems established to ensure that the adopted procurement processes allow appropriate levels of control and probity. Governance regimes include procurement policies, process management procedures, resource allocations as well as controls and review processes to gauge effectiveness of the procurement process.
Governance in procurement is based on the following:
Procurement transformation initiatives must be compliant to achieve sustainable results.
Utilizing performance dashboards and a tech-driven approach, companies can accelerate their compliance efforts and improve visibility and decision-making by enabling fluid information and workflow.
Developing role-based key performance indicators (KPIs) for business leaders, suppliers, and employees is essential for a comprehensive performance management system for procurement.
An extensive procurement capability assessment and business objectives will guide the procurement function's determination of scalability needs and desired responsiveness.
Accounts payable (AP) controls are often used to govern procurement processes in many companies. In addition to preparing and processing a demand, the end-to-end procurement process involves receiving and approving payment. Broadly speaking, it includes the process of planning purchases, determining specifications, selecting suppliers, financing, negotiating prices, and controlling inventory, which are all part of this process. A successful procurement process may require contributions from several departments within a company.
Governance and procurement processes are often resource-intensive for companies. A company's procurement strategy is often the key as it determines if it can operate profitably based on its ability to acquire materials and services.
See how GEP's procurement governance and performance strategy works.