A Crash Course in Spend Management Compliance

A Crash Course in Spend Management Compliance

If you want to achieve significant savings and value, it requires a total mind shift in the way you do business.” – Grant Kaufman, Vice President and Director of Operations, Yarco Company

This year’s keynote featuring Travelocity and Kayak founder Terry Jones emphasized just how important it is to change your mindset if you want to disrupt and innovate. And that’s exactly what it will take if you want to achieve optimal results in operations performance and cost savings.

Innovating your spend management program doesn’t require the additional overhead of a purchasing professional. However, it does require a comprehensive compliance solution that:

  • Understands the key area for compliance and how they specifically impact your business
  • Identifies and empowers your organization to monitor compliance through reporting
  • Determines the appropriate times to structure and enforce compliance and when to add new and more robust compliance measures
  • Strengthens processes and establishes best practices to support organic spend management compliance
  • Obtains buy-in and encourages participation from all levels of your organization

Both Staci Groth, Purchasing Manager, Weidner Apartment Homes, and Grant Kaufman, Vice President and Director of Operations, Yarco Company, shared about the disruptions and successes they achieved after implementing the RealPage® Spend Management solution. Following are highlights from their panel discussion.

Disrupting the status quo

“We implemented in 2011 and we went all in and drank the entire pitcher of RealPage Kool-Aid. It was the best and most challenging implementation we went through. We recruited online vendors, standardized our processes and integrated the catalog. One year after implementation I was tasked with ROI analysis and we found on 20 items  alone a proved ROI of 143% in one year. We’re a better company because of the RealPage Spend Management solution. And we don’t even have have a dedicated purchasing manager. So, this is proof that it can be done.” – Grant Kaufman

“We started restricting the loading of catalogs so people could only order from the right vendors and could buy the right things. There was a ridiculous amount of spend going on without approval, so we reengineered the purchase order process in order to ensure people were getting approval to buy stuff before they purchased it. This has helped us consistently reach goals of 90% supplier compliance.” – Staci Groth

Innovating performance reviews

“The PEPP Report (Purchasing Efficiency and Purchasing Power) is very valuable for comparing performance and revealing top offenders—whose not submitting electronic invoices and performing other efficiency tasks. This report is a great starting point for monitoring compliance within the system.

We also implemented a  scorecard to congratulate the properties that were doing well. We called this the “Dean’s List.” Then it got to the point when so many of the properties were improving and making the list that we had to raise the standard. They see it as a challenge and and step up every time to take it higher.” – Staci Groth

“Our favorite tool is a monthly scorecard. When implemented initially, we had 12 metrics, but found that if everything is important, nothing is important. We reduced it to 4 KSIs—Key Success Indicators—and we share these scorecards every month to monitor performance. We’re big on keeping score for our properties and all the different teams to see how we’re making progress on our mission. We find it very valuable and spend it a lot of time on it.” – Grant Kaufman

Cool tools for changing the way you do business

“We had three goals when it came to revisiting our management of the vendor catalog: 1) to cut time spent on shopping the catalog, 2) improve accuracy and, 3) minimize delay. With the catalog management tool,  we accomplished all three goals, saving a ton of time and creating a better customer experience. The tool makes it easy to fine tune the catalog. Our custom catalog has been trimmed to 6,000 items and has streamlined the shopping experience. This is really one of the slickest enhancements they’ve added and we love it.” – Grant Kaufman

Learn more about the RealPage Spend Management solution.