Welcome to the second article in a five-part series that will focus on how procurement, finance, and other professionals effectively build a “compliance management” checklist that addresses multiple avenues of spend management and the compliance ramifications behind strategic spend categories. The first four articles will highlight the dozen items that should be included in an enterprise’s procurement compliance checklist, which span across supply management, risk management, and complex spend management, while the fifth and final article in the series will detail how collaboration plays a vital role in both building this checklist and amending it when the need arises.
The first article on our “Compliance Management Checklist” series focused on a series of procurement- and supply management-focused items that should be at the very top of any compliance checklist. Compliance, as noted in many articles here at CPO Rising, is one of the more traditional focal areas of the procurement world, and, as business needs and the global economy evolve, other areas across the greater enterprise will require a more fine-tuned eye towards generating compliant measures.
A concept that has come to the forefront in recent years is the idea of “complex compliance,” a phrase that refers to the compliance management aspects of strategic spend categories, such as contingent labor (explained in the next article in this series), business travel, marketing services / materials and meetings / events. Each of these categories brings a specialized form of compliance management to the procurement table, and encompass a few slots on the compliance management checklist:
- Robust corporate travel policies and guidelines. Business travel, according to recent estimates, can encompass upwards of 15% of an enterprise’s total budget. Therefore, it is imperative for companies to develop and enforce policies that encourage frugal road behavior and adherence to preferred travel supplier programs, such as airlines and hotels. With the globalization of business now a new normal, and so many executives traveling to foster business development, these policies can be critical in keeping costs down and visibility into travel spend high.
- Alignment between marketing procurement and total corporate branding. I’ve often stated that procurement’s impact on corporate branding is a “nuanced” area not thought of frequently in our industry. However, in today’s business world, it is critical for enterprises to maintain a wholesome, positive image regarding their corporate brand and products / services. Leveraging suppliers with a not-so-wholesome messaging (or those suppliers that carry a negative image) can be a PR nightmare for a large manufacturer or corporation. Collaboration between marketing and procurement is a crucial step in ensuring that corporate branding is perfectly-aligned with purchasing efforts.
- Strict policies concerning how corporate meetings and events are hosted, managed, and executed. Like business travel, meetings / events are a large spend bucket that, combined with its “sister” category, could drive upwards of 25% of a company’s overall budget. Furthermore, corporate meetings have become ideal marketing efforts due to the fact that they produce revenue, foster connections with key clients and customers, and support overall branding initiatives. Due to the increase in company meetings, it is now crucial that enterprises apply procurement compliance measures to this complex spend category by implementing strict policies concerning meeting budgets and the overall execution of these events. There must be a balance between executing meetings to budget (refer here to a primer on how procurement can make an impact in this arena from a spend management perspective) while also driving live content that makes an emotional impact with attendees.
Check out the Ardent Partners LinkedIn Group for more discussion on compliance and financial operations topics. Join the conversation at http://linkd.in/1sUzIx8
