9 Things Procurement Can Be Thankful For

Procurement

As Thanksgiving rolls around, it’s important to reflect on all the things to be thankful for in our lives — professionally and personally. Scientific studies have shown that the more that you explicitly write down the things that make you happy and that you’re thankful for, the happier and likely more productive you’ll be. So, I thought it’d be good to consider what procurement organizations can be thankful for, and also what I’m personally thankful for:

Demand

Procurement is a function that’s in demand and is transforming to deliver a much broader value proposition. While all work is honorable, a function like accounts payable will never be strategic. Critical, yes — strategic, no.

But, if you believe that procurement is about using an increasingly sophisticated set of techniques and tools to tap supply market power broadly rather than just “doing deals and pushing PO’s,” then it’s simply a great place to be. If you’re bored, you’re not working hard enough to find more sources of value.

Supply

The other side of demand is supply. And thankfully, we have an increasing pool of talent that wants to work with us from the business as well as more colleges and universities with graduates — often with academic training in procurement, supply chain or operations research — who look at procurement as a destination rather than a sentence.

Procurement Has a Huge ROI

Based on our research, even bottom quartile performers have a procurement ROI (2.3X) that far exceeds any corporate hurdle rates put there. It’s a no brainer to invest more in procurement, although finance may not always agree.

Be thankful for finance, too. If you can work with them to get spend in savings visibility and set up a closed loop system for value realization, they are an absolutely critical ally, as we showed in our recent procurement-finance alignment study.

Customers

Without them, we don’t have jobs. It’s as simple as that. Procurement is a professional services function and therefore must be client focused. Also, some procurement groups use external customer issues and feedback as a rallying cry for aligning with sales and marketing groups to jointly serve them better — and get more of them.

From my standpoint, to all of my current clients and premium subscribers who are reading this, thank you! For those who read us for free, we are thankful for your readership and hope to upgrade you some day. Please let us know how we can better meet your needs. Seriously, let me know.

Suppliers

Supply market power is delivered by suppliers. Be a real customer of choice and tap them to support your objectives. Suppliers are also a force multiplier for procurement resources if you know how to manage them.

And in the spirit of thanksgiving, maybe thank them occasionally and tell them when they’re doing a good job — and when they’re not. A good supplier, and prospective supplier, will appreciate both. Also, be thankful for enabling providers who are helping to lead much of the innovation happening right now out in the field.

Technology

Yes, it’s an output from those suppliers, but the level of new technology getting developed in other areas (e.g., in the customer relationship management-related mobile/social/platform realms) are slowly getting brought over to the buy side, and it just can’t happen fast enough. As important, today’s procurement technology from analytics to sourcing to e-procurement generally works and is affordable, a far cry from the deployment gambles we had to deal with 10 years ago.

Our Peers

I made a life choice long ago to get into the research and advisory area because I knew that I’d likely get bored working in a single corporation. But more than that, I wanted to engage multiple companies and learn from them — and share the learnings back. As this community spanned practitioners, providers, consultants and academics, I’m thankful for all those that I’ve met and learned from. I’m lucky to work with such a terrific and unique team here at my current firm.

Influence

One need look no further than the impact procurement is having on M&A decisions, divestitures and private equity-led acquisitions and sales. While organizations are often quiet about the direct EBITDA impact better procurement has, the true “proof in the Thanksgiving pudding” is the involvement we’re seeing throughout the transaction the transaction lifecycle, even with upfront due diligence work evaluating the savings and risk of deals.

The Internet

Yes, it’s a curse and a blessing, especially for those like me who like to chase shiny objects — especially jazz concerts on YouTube — but it’s transforming our lives and simply becoming infused in our lives. With three kids, it can seem a little too pervasive, but that’s my responsibility to help them, and not the fault of the Internet.

Lastly, I’m of course thankful for my family and friends, who are the base of what’s really meaningful on this planet while we’re here. I’m grateful for every day I can spend on it having fun and trying my best to develop myself and serve others. Have a great holiday! And if you have something that you’re grateful for, please feel free to share.

First Voice

  1. Philip White:

    Nobody gave thanks for this website?

    Thanks everyone!

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