While many companies are starting to understand that they need to get a better handle on their tail spend — those small transactions that sit outside a company's strategic spend but which can add up and cut into profits —too often businesses run into technology roadblocks in this area.
Businesses often find that their procurement systems lack interoperability with certain suppliers and having custom purchasing catalogs for every possible vendor is impractical. Fortunately, there’s a way to solve this problem through GoProcure’s unique offering for tail spend management.
Pioneered by procurement platform Ariba two decades ago, a punchout is essentially the process in which an e-procurement platform connects to a supplier’s site or catalog while maintaining the procurement platform’s functionality. Specifically, the user can access a supplier’s catalog (which the supplier keeps updated) from a new window within the e-procurement platform.
This process is akin to how a social media user might click on a news article link and view that article from within the social media platform, rather than from the site where the article was posted. When the user closes that article, they’re back where they were within the social media platform.
Similarly, an e-procurement platform user can “punch out” to a supplier, add items to their order, and then return to the e-procurement platform to complete their typical purchasing steps, e.g. requesting approvals and categorizing expenses.
However, since not all suppliers have punchout capabilities that are integrated with all e-procurement platforms, users of these platforms are forced to make purchases directly from the supplier’s website. Thus, the user bypasses company protocols, making the procurement platform somewhat irrelevant.
How GoProcure Solves the Punchout Problem
Fortunately, GoProcure offers a tail spend solution that can co-exist with other e-procurement systems that an organization may have and maintain functionality with any supplier.
The solution is simple: Even when your supplier does not have punchout capabilities, once you have identified an external source you just copy and paste the URL from that website into the GoProcure platform. From there, you can complete the purchase as you would in any e-procurement system. Doing so allows you to track internet purchases within the GoProcure system, providing your company with full visibility on spend for all products and/or services across all departments.
Gaining this visibility and interoperability with all suppliers that offer their goods for purchase over the internet is an important problem to solve; a lack of oversight can cut into corporate performance and net margins, whether that’s because employees overspend with certain suppliers, duplicate purchases or obtain sub-par products. As it stands, most companies lack full visibility, particularly into their tail spend: nearly two-thirds of procurement leaders globally say they have little or no visibility below Tier 1 suppliers, according to a 2018 Deloitte survey.
Yet by being able to transact with any internet supplier via the simple URL copy-and-paste method, companies can ensure complete oversight over all their online purchases, regardless of size or source.
To learn more about how your business can gain full visibility into tail spend and maintain frictionless purchasing protocols regardless of your suppliers, schedule a demo with GoProcure today. You can also read more about how our platform improves the full procurement lifecycle.