ESPOO, Finland--(BUSINESS WIRE)--Companies are missing significant opportunities to reduce maverick spend and improve the buyer experience, according to a new report by Basware (Nasdaq: BAS1V), the global leader in networked source-to-pay solutions, e-invoicing and innovative financing services. The report is based on newly-completed research from The Hackett Group. Maverick spending is any purchase that doesn’t follow a compliant procurement process, which can cause businesses to lose 10-20 percent of targeted savings, according to the report.
“Perception vs. Reality: A Report on Maverick Spend,” is a Basware report based on The Hackett Group’s User Experience and Maverick Spend study, completed in Q3 2018. The report reveals that procure-to-pay (P2P) technology platforms are believed to help significantly reduce maverick spending, but that few companies are leveraging these tools today. Seventy-five percent of end-user respondents say having self-service and guided buying tools would help reduce maverick spending, but less than 40 percent of companies have such tools in place.
Moreover, the research demonstrates the enormous benefits of addressing this challenge, given that the companies that have implemented a P2P platform realize a reduction of 60 percent lost savings from maverick buying compared to companies without a P2P platform.
“Maverick spending can be hard to spot and even more difficult to control, but it’s not hard to see the damage it causes to the bottom line,” said Eric Wilson, senior vice president and general manager of North America for Basware. “With the right technology and processes in place, companies can promote a better buying experience that achieves 100% user adoption – this is absolutely critical if companies stand to rein in maverick spend and save millions of dollars a year that they’d otherwise waste on unmanaged spending.”
In addition to implementing P2P technology, the report uncovered other opportunities for organizations to improve the buying experience within their procurement function, including:
- Enhancing the category experience by developing category strategies and lists of preferred suppliers for each spend area. The categories most available for self-service purchasing include travel & entertainment (75%), general equipment/supplies (72%), and IT/telecom (61%), while all other categories are below 40 percent adoption. Similarly, organizations need to address specific categories where users have difficulty finding what they want, such as capital equipment, facilities and several service-related categories, as they currently provide the least intuitive buying experiences, according to the report.
- Addressing spend culture through holistic stakeholder education and strategic change management. The report identified adverse spend culture – including making purchases that are assumed too small to matter and lack of regard for existing procurement policy – as a leading cause of maverick spend.
- Better targeting the internal customer. The report showed that limiting purchasing access for non-procurement employees correlates to a 30 percent increase in experience rating. Culling a long a tail of infrequent requestors while offering high-touch assistance through a P2P platform with multiple end-user support capabilities to core end-users drives better outcomes both in the buying experience and in driving down maverick spend.
The research surveyed respondents across 50 companies in the United States, spanning roles in procurement, finance, supply chain/operations and other administrative functions. The pool of respondents comprised of two core groups: end-users and buyers (those making purchases on a regular basis) and source-to-pay decision-makers (individuals in sourcing, purchasing or purchase-to-pay (P2P)-related finance roles who don’t purchase regularly, but make the decisions on process, policy and technology).
To learn more, download the complete report here.
About Basware:
Basware offers the largest open business network in the world and is the
global leader in providing networked purchase-to-pay solutions,
e-invoicing and innovative financing services. Our technology empowers
organizations with 100% spend visibility by enabling the capture of all
financial data across procurement, finance, accounts payable and
accounts receivable functions. Basware is a global company doing
business in more than 100 countries and is traded on the Helsinki
exchange (BAS1V:
HE).
More information about Basware is available at www.basware.com.
About The Hackett Group:
The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices digital transformation firm to global companies, offering digital transformation including robotic process automation and enterprise cloud application implementation. Services include business transformation, enterprise analytics, working capital management and global business services. The Hackett Group also provides dedicated expertise in business strategy, operations, finance, human capital management, strategic sourcing, procurement and information technology, including its award-winning Oracle and SAP practices.
The Hackett Group has completed more than 15,000 benchmarking studies with major corporations and government agencies, including 97% of the Dow Jones Industrials, 89% of the Fortune 100, 87% of the DAX 30 and 59% of the FTSE 100. These studies drive its Best Practice Intelligence Center™ which includes the firm's benchmarking metrics, best practices repository and best practice configuration guides and process flows, which enable The Hackett Group’s clients and partners to achieve world-class performance.
More information on The Hackett Group is available at: www.thehackettgroup.com, info@thehackettgroup.com, or by calling (770) 225-3600.