Survey finds spend compliance still a challenge for office buyers
By Maria Varmazis -- Purchasing, 2/12/2009 2:00:00 AM
A joint report by OfficeMax and Purchasing shows that there's still room for buyers to capture maverick spend in their companies.
Buyers know that a key component in getting costs under control is compliance. In a category as vast and open-ended as office products, compliance can be especially tricky to pin down. A new joint study conducted by supplier Office Max and by Purchasing shows that many office buyers have a good grasp on their compliance, but the lofty goal of "total compliance" remains elusive for many still. Of the companies surveyed, 31% reported more than 91% compliance in their office buy, with the majority of buyers saying they fall somewhere between 61% and 91%. The biggest challenge is when the culture of the company is decentralized with lots of decision makers out in the field, the survey shows. If there's a culture of resistance it can be difficult to overcome unless the leadership of the company says it's an important initiative.
While for most buyers the concept of executive buy-in to aid in compliance isn't a new concept, that doesn't make it any easier to implement. The study shows that even with the aid of spend-tracking tools, enforcing compliance can be tricky. Among the reasons is that often there's a perception that because office supplies is a low-risk category—no company is going to go out of business because of a missed deliveries of office products—it can be high risk if you're trying to launch a strategic platform and change into something central.
Unlike a core commodity, say, for a manufactured item that only hits the plant floor, the office spend is a far-reaching category that nearly every employee has a hand in buying. By rounding up the office buy and enforcing compliance standards on how all those employees buy the supplies they need for their day-to-day operations, companies are reducing the chances that an employee will buy off-contract. And many do. That's why the office buy can be frustrating for procurement professionals and difficult to control. Many employees may consider themselves a savvy buyer and they feel compelled to make their own purchasing decisions, where they may not in another commodity spend area.
Another view of the compliance issue is that, in some cases, buyers don't know exactly how much of their spend is off-contract and don't see it as an issue worth examining. Related to that, the study found that a number of office buyers vastly underestimate how much buyers are engaging in maverick spend. Sometimes it's a matter of small buys flying well-below the radar, which can happen even with compliance tools like p-cards. Additionally, if a spend threshold is too high, some buyers find that maverick spenders buy in small increments. But, small incremental buys can add up.
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