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CIPS Leadership Series How Are You Managing and Monitoring Your Compliance Requirements?

Coupa and FourPL recently co-sponsored a webinar through the Chartered Institute of Procurement & Supply (CIPS) – Australia & New Zealand. The panelists included strategic sourcing and procurement heads from a European Automotive Company, an Asset Management company, and Phil Foti, Director, Product Strategy & Innovation at Coupa. The main focus of the session was a discussion on how leading companies are managing compliance throughout their organization, and the role procurement plays in creating a culture of compliance.

 

The panelists shared insights from their organizations, how they built compliance into their processes, and how COVID-19 impacted compliance in their organizations.  Here are four key takeaways from the webinar:

 

1. Procurement Should Drive a Corporate Culture of Compliance

 

Compliance is everyone’s responsibility in the company, not the job of one person or one department. In order to build a culture of compliance, you have to demystify compliance and help people understand what it means. Compliance should be built into your business workflows and processes so it is part of the process, not something that happens at the end of the process. Once you’ve established compliance as part of the process, employees have the freedom and flexibility to operate as long as they stay within key parameters you’ve set.  A culture of compliance and accountability allows your organization to make decisions and act more quickly.

 

One of the best ways to help sell your organization on compliance is to highlight the risk associated with noncompliance. The reputational risk for your brand and you as an individual employee is quite high if the organization isn’t working together to ensure compliance. In addition to the regulatory obligation, organizations also have a moral obligation to do the right thing. As a procurement team, you have to communicate and make compliance approachable and part of the way you do business.

 

2.Relationships Are Key

 

Supplier relationships are the core of the procurement and strategic sourcing function. Fundamentally, you are trying to build relationships for the duration, not a short period of time. It’s the long-term partnership that hold strategic value for your business and the suppliers.

 

In times of crisis, such as COVID-19, these relationships become even more valuable and have given procurement a platform to show how it can be more strategic. For example, an acquisition that has a sudden need for Personal Protective Equipment (PPE) can be seamlessly integrated into an established supply chain to deliver immediate continuity of essential goods and services at a time they may have otherwise struggled to do so. You are also able to see your strategic relationships paying huge dividends in ensuring you continue to have access to the supplies that are most critical to the business. In return, you can protect your supply chain relationships by continuing to use them and honoring existing agreements.

 

COVID-19 has created an opportunity for businesses to expand the dialog with their supply chain. You need to talk to suppliers not only about your short-term needs, but what you need and expect in the long term. During a global pandemic, reliability in the supply chain is even more critical. You need to maintain the relationships the same way you would in any other circumstance and ensure contracts continue to benefit both parties.

 

3. Crisis Accelerates Need for Automation and Digitization

 

The automation of key procurement processes with compliance built in gives you the opportunity to adapt to new situations quickly, while still providing greater visibility into compliance. This level of visibility into spend and compliance, even during a global pandemic, is only possible with a foundation of automated and digitized processes.

 

Businesses expect procurement to continue to ensure compliance while sourcing during a time of significant supply chain disruption. The COVID-19 pandemic has created recognition of the value proposition of strategic sourcing and has boosted the agility and productivity or organizations that have invested in automation and digitization as the professional workforce transitions to working from home.

 

A crisis requires processes to be expedited significantly. A process that normally takes 5 days now needs to be complete in 24 hours. This expectation puts a lot of stress on your processes and gives you the opportunity to automate additional workflows, test your processes, and identify additional areas for improvement.

 

4.Sustainability, Inclusion, and Diversity Add New Complexities to Compliance

 

In the past several months, diversity, inclusion, and sustainability have become major topics while the world is still managing through the COVID-19 pandemic. Procurement is faced with increasing tension between sourcing sustainably and finding cost savings. In many organizations, these are siloed functions, which diminishes visibility and makes decision making more difficult.

 

Organizations need the visibility that can only be provided with all of the data in one place. Automation and digitization of data and processes is the only way to get this level of visibility across processes and suppliers and be able to use the levers of cost savings, compliance, diversity, inclusion, and sustainability to achieve business objectives.

 

Ultimately, even with a fully digitized and automated procurement team, operational tasks still exist and have to be done. Being strategic also comes with greater responsibility and greater accountability. Automation and technology give you the ability to minimize time spent on operational tasks, but the procurement team also has to deliver on its commitments.

In summary, procurement leaders play a critical role in managing compliance and ensuring long-term success, throughout the crisis and beyond. Read the 2020 Coupa Benchmark Report to discover 12 Key Performance Indicators (KPIs) across the four areas of Process Efficiency, Digitization, Risk, and Spend Optimization to better understand your company’s performance relative to your peers. To help you plan for the future, access the latest Coupa Busines Spend Index to understand trends in business spend sentiment.