Procurement professionals know all about the pressure to cut costs. Could their paychecks someday see the profits of their successes?
Last week, American Chamber of Commerce President Louise Phelan urged the Irish government to consider overhauling the personal taxation system, with the effect of making such a reward scheme possible in a tax efficient way. Phelan stated:
‘Higher productivity is a prerequisite for a sustained return to growth and to job creation. If companies are willing to set high performance targets for their businesses and share the fruits of that performance with their employees, then there will be benefits for Ireland, those businesses and the employees. The tax system should be used as an incentive to kick-start this concept on a wider scale.’
If an employee reward scheme does materialise in Ireland, it’d be sure to motivate those with the ability to drive efficiencies and increase productivity. But when it comes to cutting costs, where would they start?
In the case of the procurement department, key to reducing outlay is sourcing the best value before each purchase of goods and services. e-Sourcing encourages supplier competition while cutting administrative costs by wiping out paperwork and significantly speeding up the sourcing process.