Commercial management is a term used to describe the business disciplines within an organisation to generate a financial return. It is applied at both policy and transactional levels. Commercial policies relate to the policies that define how business will be conducted. Many of these policies are reflected in the terms of any contract in which the organisation engages. At a transactional level, commercial management is applied through the effective and efficient management of trading relationships to ensure their continual alignment with business ambitions and to manage the financial and risk implications of change through the contract life-cycle.
Many organisations struggle to capture, let alone manage, their entire enterprise-wide external spend, yet virtually every organisation is tasked with reducing it. Further, traditional strategic sourcing programmes have been replaced with rapid sourcing and cost reduction efforts, where category experience and supply market knowledge is key to realising speed-to-benefit.
Vendors frequently have more accurate spend information than the organisations they serve. Organisations often have multiple and often fragmented supply arrangements with the same vendor or duplicate relationships across the enterprise. As a result many organisations procure products without incorporating the enterprise-wide volume into negotiations leading to lost opportunities to maximise purchasing power at vendor negotiating time.
Often focussed upon delivery and restricted by unsuitable initial agreements, many organisations resort to ‘off-contract’ or ‘maverick’ buying resulting in loss of pre-negotiated front-end discounts as well as back-end rebates or other volume inducements.
Procurement Transformation – development of sourcing advantage
Realising the full value of a strategic supply management approach often requires a transformation of a company’s procurement process, a top-down review of how an organisation procures its products. This requires an integrated approach to reviewing the strategies, processes, organisation and supporting technologies needed to create a leading strategic supply management capability.
Our Expertise and Capability – Enhancing Procurement Impact
Concept Gemini offers a wide range of services to help clients derive maximum value from sourcing, procurement and supply management functions, specific services include;
- Maximising purchasing power, developing an understanding of spend patterns with vendors
- Improving contract compliance, identifying and reducing off-contract buying to preserve hard fought discounts and inducements. Advanced Spend Analysis enables companies to identify, monitor, and address this issue along with other ill suited consumption patterns and compliance issues.
- Advice on strategic sourcing. Based on in-depth knowledge and experience, supported by innovative tools and techniques tailored to delivering speed-to-benefit.
- Purchase-to-payment (P2P) process mapping, identifying the payment process within an organisation.
- Complex services, unique approaches to driving cost savings and improved value from complex or highly technical services such as legal, marketing, outsourcing and even consulting. Concept Gemini has developed category knowledge and we have successfully helped our clients expand the reach and value of strategic sourcing beyond basic commodities into more technical areas.
Our unique strength lies in being able to embed these capabilities within organisations, enabling clients to achieve sustainable high performance and long term benefits.