The title of this post is the focus of a panel discussion that I'm facilitating this week at Emptoris Empower. While I look forward to hearing what the panelists have to say about the topic, I'm already forming a few opinions of my own as to what leaders are doing differently when it comes to weathering the down economy. First and foremost, leaders are doing more with less -- but not necessarily fewer resources. How is this possible? As the COO of one large bank shared at the IACCM event last week, the procurement organization, which reports to him, was the only group in the company that was actually able to justify a headcount increase -- and without additional cost. They were able to do this by moving to a shared services environment in India and other developing markets centers. In other cases, I'm seeing leaders tackle areas like e-Invoicing / EIPP to save costs by reducing the number of resources needed to handle the function.
But leaders are not just automating transaction functions to survive the down market. They're also retrenching to look at new ways to deliver total cost savings to the business. In a few cases I've looked at recently, this means going after categories of spend that have previously been off limits (e.g., marketing, legal). In others, it means going back and re-evaluating global sourcing strategies that for one reason or another are failing to deliver the savings that they originally promised. But perhaps the most important investment companies are making in a down market to drive returns is compliance. Lost savings matters in a rising market. But it matters even more when the top line numbers are flattening out. After the panel discussion this week, I'll share some additional thoughts based on what the participants have to add to this list.
- Jason Busch