Snap Poll With ISM: What’s the Procurement Value Mix Today? In 3 Years?

Businessman hand draws success words on whiteboard

Attention, Practitioners: If you want to build a “modernist procurement” organization – and truly benchmark yourself against your peers – you have 1 week to participate in this 5- to 7-minute snap poll we’re doing in conjunction with the Institute for Supply Management (ISM) ahead of the ISM Metrics Symposium. More details on the poll below, but first...

What Is a Modernist Procurement Organization?

Let’s take Modernist Cuisine, for example, a recent development familiar to foodies around the world (thank you Nathan Myhrvold). It applies science and new methods and tools to get more culinary value from traditional ingredients, but it also employs newer ingredients to help deconstruct and reconstruct foods into more evolved cuisine. For example, adding a natural salt called sodium citrate to pasta, water and a block of cheese can create some mind-blowing mac and cheese.

So, a modernist procurement organization needs to evolve to meet the needs of modern enterprises that are seeking new ways to grow – such as using digital strategies involving cloud computing, big data, mobile, social, the Internet of Things and so on. Doing so requires a new mix of “ingredients.” Cost savings are like sugar – sweet in the short term, but not good for your supply chain’s health in the longer term. Procurement is unfortunately boxed into the doughnut business toiling over the friers to serve up the sweets. And like a doughnut-based diet, it’s obviously not sustainable.

Truly modernist and progressive procurement organizations are working with their enterprise partners to help them enable innovation and growth while protecting them from supply risk. Traditional procurement groups that are short order cooks with the same old savings menus will find themselves further and further behind. But changing the ingredients in the procurement value mix is not easy. For example, there’s no simple measuring scale to weigh the ingredients called increased innovation or revenue uplift. But some firms are finding ways to cope with this by using leading metrics and other techniques. And others are frankly a bit stymied by this value measurement challenge.

What Does the Procurement Value Mix Look Like Today and in the Future?

We do believe that the “mix” of value delivered by procurement-led activities will meaningfully shift over the next 3 years, but unfortunately, we have no hard data on it – until now. We’ve created a 5-to 7-minute snap poll in conjunction with the ISM that simply asks for the “procurement value mix” (i.e., the percentage breakdown of the various types of procurement value-add) today and in 3 years. By seeing how and where the value streams will shift, you’ll also be able to plan for which competencies you’ll need to invest in. (We ask a question on that too.)

Practitioners who participate in the poll will not only get to benchmark their value mix against others today and in 3 years, and see the competencies they’ll need to invest in, but also see how others measure their more complex value streams. We are additionally offering study participants a breakdown of what level of credit procurement receives on a dozen specific value streams – based on a previous ISM/Spend Matters research study conducted earlier this year that is not available to the general public. If you want to build a modernist procurement organization, you have a week to participate in this study because we’re using it for the ISM Metrics Symposium being held a week from Thursday.

So, get modern and take the poll!

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