Purchasing as a lever for increased compliance with corporate governance
Without a doubt, compliance with corporate policies is one of the most "cared for" issues today. For a few years now, surveys on this subject carried out by purchasing departments, have shown percentages above 65% in terms of the importance given to this issue.
The digital transformation of companies must take into account the level of corporate compliance as a critical objective to achieve, both globally and in the digital transformation of purchases.
How is the development of digital functionality within shopping solutions progressing with regards to compliance in Spain?
Despite increased investment in digital shopping solutions, we are halfway to an optimal situation. The vast majority of CPOs are concerned with maximizing contract coverage, collaborating with the legal department to streamline the definition of templates with effective clauses, or maintaining a level of information on their suppliers that minimizes financial or corporate social responsibility risks.
The problem is that this concern is met with traditional resistance to change or the perception that resolving these issues will involve high investments. In other territorial areas, it is increasingly common to have, for example, direct communication with companies responsible for auditing financial data or Corporate Social Responsibility. This communication automatically updates the information on each new supplier and allows for a much more reliable level of approval, quickly impacting the determination of the suppliers with the least risk for the customer.
Within your purchasing departments, what tools are available to guarantee the achievement of the objectives sought by these corporate procedures?
At Synertrade we believe that the automation of the tasks that provide less value, despite being necessary, is one of the parameters which should be taken into account. This automation will by necessity be guided by the definitions established within the internal procedures of the companies.
The first thing would be to make it black and white as to what we consider to be the most significant targets:
- Comply with legislation. In May 2018, the European Union’s General Data Protection Regulation (GDPR) came into force
Tune in systems already existing in the company, with those derived from the digital transformation process;
- Automate the approval points for each of the corporate processes, through the appropriate avenues, for both internal approvals and supported external approvals;
- Minimize the risk derived from relationships with current suppliers rather than adding new;
- Create a reliable set of indicators for the level of compliance within each of the processes, both for at the global level for each individual process as well as for every step within each one of the processes.
What tools do companies have to carry out a correct compliance policy?
Compliance with good corporate governance is not something as simple as putting a solution in place. It is the tools that make the lives of the people involved in the processes „less complicated“.
In keeping with the demands of each objective, specific tools are required:
- The European GDPR regulations:
- Execute the „Right to Oblivion“;
- Declare/Report any modification with the regards to the maintenance of personal data.
- The automation of purchasing processes must take into consideration complementary processes managed in other systems such as ERP, cash management…
The strategy is to synchronize organizational structures, suppliers…; in short, all the transactional processes that are part of purchasing with those in finance, quality, production…
Every company has different criteria for launching approval processes at specific times within each of their processes. Tools that can provide this functionality are the ones that can guarantee compliance with the required authorizations that are part of the internal procedures.
Collaboration with analysts, who provide supplier risk indicators, is a must in order to be able to comply with specified requirements derived from the purchasing process.
Automation will allow purchasing specialists to use all their knowledge in the analysis of information.
What benefits does the digital transformation of Purchasing bring to a company with regards to complying with good practices?
We immediately think of the Finance Department, which can rely on Purchasing to verify its own budget. In addition, other departments such as R&D can also benefit from purchasing analysis to facilitate product design.
Purchasing therefore becomes a preferred partner to other departments and can positively influence the company’s action plans as well as its overall performance.
We always say that however much progress has been made, the speed at which technological development is taking place means that we still have a long way to go. Based on the possibility of „mutation“ within a tool, the technological flexibility of these tools, is making it increasingly possible for changes to regulations, both legal and internal to companies, to be applied on a daily basis by managers without the need for large investments.
Technological advances such as Real Time Decisioning, bots, mobile devices, etc… are currently facilitating a better „life“ for purchasing departments, and indirectly affecting the optimization of the rest of the departments.