• Louise Cairns 12/01/2016 10:23AM

    In Source to Contract

    What do you think is the best way to eradicate "maverick purchasing"?

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  • Answers (15)

  • Justin Plokhooy

    12/01/2016 03:02PM

    Relationships, Relationships, Relationships...growing your relationships with those perpetuators of maverick spend is vital to ensuring their understanding of the value Procurement can bring. The reason they are behaving like they are is because they probably either don't fully understand what Procurement brings to the table or had a bad experience that has tainted their view of Procurement. This is a situation where you will catch more flies with honey rather than vinegar. Heavy handed tactics won't work.

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  • Helen Mackenzie

    12/01/2016 08:02PM

    Make it easy to buy on contract (information about contracts, catalogues on your eProcurement system), engage with your colleagues to get buy in (tell them about contracts and the value they bring) and then use big data to keep an eye on them and give them feedback when any maverick spend arises.

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    Iain Wicking Making sure the 'system' used is also one that is easy to use for casual buyers. One that also captures and consolidates all transactions you have a full picture of spend across the board.

    14/01/2016 11:10PM

  • Daniel Warnock

    12/01/2016 10:41AM

    By using a taser. There might be laws against it though.

    On a more serious note, maverick purchasing is a symptom of a problem, not the problem itself. People buy outside the procedure for various reasons (lack of awareness of the procedure, the existing contract does not suit their requirements etc). Identify the underlying problem and maverick purchasing should be minimised.

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  • James Ferguson

    13/01/2016 01:21PM

    There have already been some great answers here and for me I would say that maverick purchasing is normally a sign that something is wrong with the current process; people are unaware of the agreements in place, they don't like the chosen suppliers, the system sucks, the procurement process takes too long, they can't get the exact goods/services they need or some other issue that is stopping them. Either way, it is Procurement's job to find out what the root cause is and solve the customers issue.

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    Iain Wicking You are right...'root cause analysis' is a good place to start. Done that loads of times. Most organisations experience the issues in AP. They then try and solve that problem not realising the cause or causes are 'up stream' in terms of poor processes, hard to use systems and/or poor leadership that fails to mandate systems (providing they are easy to use) and project the value of good procurement practices (could a combination of all of these). Had one client that wanted out outsource AP but with a change in systems and processes the problems went away as contract compliance increased overtime.

    14/01/2016 11:17PM

  • Bertrand Maltaverne

    13/01/2016 10:47AM

    Great answers so far!
    I would say that the answer depends on causes of maverick (where/what/why).
    Answer also depends on the company culture.

    But in general, I would say a "global" approach: people + process + technology.

    On the people side and depending on culture of discipline in a company, I would say a mix of
    - bad cop with taser (I like Daniel’s idea, could be used for many other things…) or let’s say a strong top-down message about the role of Procurement (easier to deliver when Procurement is seen as value-adding)
    - good cop: stakeholder relationship (understanding, education, collaboration…)

    Obviously, the process and technology should make so that the “buying experience” is satisfactory.

    But, there are other ways to not reduce it but to control it or to take advantage of it. You can never control 100% of the spend the same way. P-card / Credit cards are great for some parts of the spend!

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  • Sergio Giordano

    12/01/2016 03:45PM

    1. Driving buying from suppliers "approved" by the company at pre-negotiated prices (eg. Framework Agreements, e-catalog etc.)
    2. Enable approval systems of purchases
    3. Reduce delays and errors in processing invoices
    4. Separate the roles and responsibilities of the buying process (Applicant and buyer)
    5. Adapt P2P processes for the various types of purchase (Segmentation)
    6. Each purchase must match with a valid order
    7. The procedure P2P must be clear and must be well communicated. A procedure P2P to work must be clear but rigorous
    If you are interested to know more about this topic please take a look at the following link:
    https://www.linkedin.com/pulse/maverick-spendinga-virus-can-fatalhere-how-defeat-sergio-giordano?published=u

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  • Justin Plokhooy

    12/01/2016 03:01PM

    Relationships, Relationships, Relationships...growing your relationships with those perpetuators of maverick spend is vital to ensuring their understanding of the value Procurement can bring. The reason they are behaving like they are is because they probably either don't fully understand what Procurement brings to the table or had a bad experience that has tainted their view of Procurement. This is a situation where you will catch more flies with honey rather than vinegar. Heavy handed tactics won't work.

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  • Piyush Shah

    05/06/2017 11:21PM

    At a place I worked, there was a feeling us (the people at the plant) versus them (the people at head office). Maverick buying was a way to assert our independence and dominance over them. It was clearly brinkmanship from both sides.

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  • Richard Price MCIPS, MIoEE

    15/01/2016 01:15PM

    Understanding organisation spend correctly; where does it go, what's it for, is there a contract, etc, etc. Engaging and educating stakeholders and crucially listening to feedback.

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  • George Thompson

    14/01/2016 11:05PM

    Having a good e-Procurement Portal in place, which is mandated to be used for seeking competitive quotes from suppliers, would be a great help. One that allowed you to set up Panel Contracts would be preferable.
    These days it is not really good enough to allow employees of companies to arrange quotes via e-Mail. There is no probity around theses processes and there has been countless examples of these processes leading to serious corruption in procurement, eg. two quotes from suppliers and a cheaper quote from a favored supplier arriving after the receipt of the other two quotes.
    Simple to use, robust and efficient and very inexpensive SaaS e-Procurement Portals are available, that are disrupting the expensive big enterprise systems in the market place and all procurement professionals need to be aware of their potential in reducing maverick spending.
    By all means set guidelines, but ensure that there is a user friendly e-Procurement system in place to support your policies

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  • Cristian Martin

    13/01/2016 02:16PM

    Address why is there maverick spend.

    Do you have the right policies in place?
    Has training been given to staff?
    Do you have the support from your senior management team?
    Have you given poor customer service in the past?

    Procurement is cool, people you work with should think that too and should want to work with you. Don't give them an excuse to think otherwise.

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  • Scott Seymour

    13/01/2016 03:00AM

    Communication and building relationships. You also have to prove your worth to the stakeholders...which can be a daunting task, but stick with it and let them see the value sourcing can bring. Follow this up with data to show the results you are bringing.

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  • Mike Breen

    12/01/2016 06:19PM

    Through a formal electronic approval process and the continued executive perspective that the best leverage is through a formal process as often it defeats any form of standardization and often particularly in IT ends up costing far greater to support a purchase than what initially was forecasted.

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  • Nitin Sharma

    12/01/2016 01:04PM

    Maverick spend can be seen as opportunity to address it by engaging those stakeholders well in advance and if these buyings are different in nature then include these services in contract with core vendors.

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  • Hamod ALROSAYES

    12/01/2016 10:33AM

    If you look at maverick buying definition you will find that it is the purchasing outside of standard procurement processes. Which is in my opinion to eradicate it by Creating Bulk System Buying Process.

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