Spend Management Goes Upstream (Part One: An Introduction)

This week, I plan to focus a number of my posts on the potential for procurement and operations organizations to move their total cost, quality, and performance influence further upstream in an organization. This is an area I've tackled in a consulting capacity quite a bit of late, examining the potential impact of procurement and operations intelligence on upstream processes for a number of clients across the software and services market. But I've not tackled the area on Spend Matters to the extent it deserves so far. This needs to change. Because it's a concept and philosophy I'm quite stoked about to the least.

I'll admit that the original idea of driving Spend Management upstream is nothing new. Heck, we've all heard mantras such as "design for cost" and "design to build" before. But this week on Spend Matters, I want to dig into depth into an area which I believe will be as important by 2010 to companies as strategic sourcing and competitive negotiations are to bottom line procurement-driven savings today. Without giving all of this Spend Matters mini-series away, you'll observe that one major finding that I'll share later this week is that in many companies, procurement and operations teams will need to drive the movement to influence design decisions and trade-offs upstream (unless visionary line of business and finance executives step into to steer the organizational ship in this direction).

Tomorrow, I'll post a succinct introduction to the concept of driving Spend Management upstream in the procurement process. To bring the concept alive and get away from my view, on Wednesday and Thursday, I'll profile the different philosophy of two companies, Akoya and aPriori, who each have a different perspective on driving Spend Management and operational metrics and intelligence upstream. And on Friday, I'll offer up some case examples of the value that such capabilities can bring in the real world -- to manufacturers and non-manufacturers alike.

Even if you're on the indirect or services procurement side, please stay with me this week. Because I can promise you, some of the implications that I'll analyze and conclusions that I'll draw can have impact on everything from outsourcing decisions to MRO Spend Management. Stay tuned! And above all, please chime in with your own ideas, as we start a conversation whose volume and frequency I suspect will rise in the coming months and years, on Spend Matters and beyond.

Jason Busch

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