The key to acquiring best practices with compliance management in an organization is to combine efficiency of people, processes and technology.
Compliance with contracts and procurement policies is a basic practice which is required in any organization. It is needed for deriving maximum benefits of sourcing and to improve chances of achieving the goals of an organization. Essentially procurement compliance in organizations takes place both internally and externally.
Internally, it is best practice for companies to implement the use of software applications to ensure compliance with processes involved in sourcing, buying, contracts and suppliers. According to a survey conducted using eight different procurement programs, those companies which ensured best practices in procurement of compliance in Demand Management and Contracts had the highest returns.
Similarly, compliance with strategic sourcing is a best practice which is greatly regarded in terms of benefits. These strategies are guidelines for avoiding unnecessary costs and implementing the concept of importance of opportunity cost. Companies which procure compliance with the basic strategies required for best practices are guided to success without much risks attached.
The most efforts made by organizations ensuring best practices in compliance management focus on compliance with sourcing and buying processes. This involves compliance with pricing contracts by suppliers. Companies ensuring procurement of compliance employ technology and software applications to achieve their objectives. The two greatest challenges faced in ensuring best practices for procurement compliance are lack of resources and compliance tools required.
For suppliers there is the need to verify their preference over others before purchasing. This involves their proactive involvement with ensuring compliance with pricing contracts, delivery of goods and other requirements which vary with businesses. Less than half of the companies in the survey had succeeded in implementing the tools required for compliance management.
Conclusively, a feedback from the people involved in ensuring compliances will also be helpful. Technology alone is not enough. Therefore, it is a recommended best practice to ensure that compliance programs are reviewed regularly. For best practices in procurement compliance better polices and tools to promote proactive compliance by employees are also recommended.