Tropic reposted this
Vice President & Head of Procurement | Spend Management Enthusiast | Advisor | Professor. On a mission to prove that effective and strategic procurement can have a huge impact for companies (including tech!)
The days of rubber-stamping spend approvals are over. Finance leaders are (rightfully so) pushing back. But here’s the problem: Much of the pushback is on new spend. Whereas legacy spend has an easier time getting through. I personally think that’s backwards. Here’s why: Legacy spend was often approved during the good years. When money grew on trees. New spend is being scrutinized and measured against a raised bar. My recommendation: Take a good hard look at the spend you have approved in the past few years (it’s likely a lot!). If it were new spend today, would you still approve it? If you wouldn’t approve it as new spend today, you probably shouldn’t approve it as renewing spend either. #Spendmanagement #Finance
We are in sync. I just posted about benchmarking.. and I see that as tied into this question of how are you handling legacy spend? Just because we’ve been buying something forever, does it mean we are efficient at buying it? And your question, does it mean we even need it? Thanks Michael Shields, great post.
That last line perfectly wraps it all up.
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2wZero-based budgeting, baby. You don't need to do it every year because it's a lot more work but once in a while, it's a winner.