Companies looking for savings

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  • October 8, 2019
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Falling unemployment, rising wages and growing problems with attracting qualified employees make the USA a market for employees. Companies cannot optimize the costs of employment, so they have to look for savings elsewhere. Purchasing processes, which generate more than half of the costs in the company, have a great potential. Modern IT solutions are increasingly important in their optimization.
– This year, companies will be very interested in optimizing the costs of their own operations. However, it will become increasingly difficult to optimize personnel costs. Few entrepreneurs today think about redundancies. Therefore, the trend will be the optimization of purchase costs, which in most enterprises constitute over half of the actual costs of activity – says Mateusz Borowiecki, President of the Board of OptiBuy, an agency providing analysis and purchase consulting services for companies.
The unemployment rate at the end of November fell to a record level of 8.2% according to the Central Statistical Office (GUS). According to a survey conducted by the personnel consulting agency Randstad, this year a record number of entrepreneurs intends to raise the salaries of their employees. Over the next six months, as many as 44 percent of the surveyed companies’ representatives plan to raise their salaries (increase by 19 percent in comparison with the previous quarter). On the other hand, 32% are planning to increase employment.
This does not mean, however, that companies are not looking for savings. A survey conducted at the end of last year by Diners Club USA shows that in the near future companies from the sector intend to reduce costs. This is a priority for 41% of the surveyed entrepreneurs.
– In my opinion, there will be a shift in the areas where companies will look for savings. Purchasing processes are an area that has been forgotten for many years, but over the last few years it has become noticeable. There are fewer and fewer companies that do not have their own professional purchasing managers. If we compare the American market with trends in Western Europe, we will see that the purchasing processes there have been under strict supervision for at least 10-15 years – says Mateusz Borowiecki.
As he emphasizes, almost every company is able to optimize its purchasing costs, for example by reducing the cost of electricity or changing the provider of telecommunications services. However, companies, especially those with complex structures, can look for savings in many other areas.
– The challenge will be to find less obvious optimizations. Not only finding a cheaper supplier or buying something cheaper, but also a broader look at the entire life cycle of a product in a company. Enterprises should focus on such optimization that will not only enable them to purchase a lower price, but also lower the cost of using the product – says Mateusz Borowiecki.
The President of OptiBuy points out that the importance of technical tools and IT solutions in the area of purchasing is growing. As it is increasingly difficult to recruit good purchasing experts, companies focus on reducing manual tasks related to order processing, handling invoices or describing documents that do not bring any added value to the business. On the other hand, they are increasingly focused on strategic tasks related to cost management or supplier base management.
– All these manual tasks need to be automated, therefore ERP systems are implemented and extended with cost management functions. In this respect, we are many years behind. In the USA, the first generations of purchasing systems are usually implemented at the moment, while in the West, those that were implemented over a decade ago are being replaced by those that were implemented – says Mateusz Borowiecki.

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