In my first post discussing Pierre Mitchell's IACCM presentation, I shared a few of the hundreds of metrics Hackett Group tracks in their procurement advisory practice. Indeed, I barely scratched the surface on the types of information they track. But Hackett also has a qualitative -- some might say almost a literary side -- as well. Or at least Pierre Mitchell does when he uses the word "STORM" to describe the situation that procurement organizations find themselves in.
What does STORM stand for? The "S" is all about savings. And in today's environment, savings are hard to sustain because of supply market challenges which include currency, trade, tax/tariff, and commodity price inflation to name just a few areas. The "T" comes next. T represents "top notch technology and talent" both of which are in short supply in practice (if not in theory). Far too many organizations get one or both of the areas wrong, either by licensing software that sits on the shelf or goes underused or by failing to match skill-sets and packages with the capabilities required to get a job done.
Next in this acronym comes "O". And "O" is all about operations. Or operational challenges to be exact as companies focus too many efforts on "lower value processes that divert precious attention and funds "R". And I'm sure you've got a good sense of at least one of the word it stands for. That would be risk -- but to risk Pierre also adds regulation and the challenges of keeping up with reporting and compliance. Fair enough. But I'd argue that risk should be an even larger priority for many procurement organizations today. That brings us to the final letter: "M". M is simple. It stands for more, more, more! Everyone wants procurement to do more. CEOs want more growth, more innovation, more brand enhancement (e.g., green/CSR procurement policies) but without more investment. Customers also want more for less and they want it now, creating shorter and more volatile product lifecycles.
So there you have it. All of our Spend Management challenges boil down to the perfect STORM brewing outside. But there was also a storm of confusion about to hit the projection screen in his presentation as well following this simple, elegant descriptions. Coincidentally, Pierre jumped straight from this clear, easy to grasp topic in his PowerPoint to one of his famous eyesore charts which clearly shows that he has at least twice the average intelligence of everyone else in the room (for some idea of what I'm talking about, check out this slide here). Alas, the Spend Presentation Master is getting better at simplifying his arguments, but sometimes we still get a glimpse of the old Pierre.
- Jason Busch