In Accenture’s most recent study on procurement, Procurement’s Next Frontier – The Future Will Give Rise to an Organization of One, the authors suggest the “virtual company mall” will provide the wrapper for the core of a firm’s shopping and tactical buying experience – i.e., how frontline users – and perhaps even procurement – shop for and purchase goods and services. It’s a clever thought to suggest that a single toolset – or more likely a single interface for users – will form the basis of a shopping system. It’s also clever to call it a mall, since within a mall, much like the future buying system the authors describe, there can be different branches or anchor stores as well as all of the individual merchants in smaller spaces that sell their wares. Yet for this analogy to work, a lot of elements need to come together.
Category Archives: Procurement Research
In Accenture’s daring report, Procurement’s Next Frontier – The Future Will Give Rise to an Organization of One, the authors spend a bit of time exploring the future of procurement technology. In fact, they suggest 5 areas that are likely to augment or replace today’s current tech investments. One of these technology areas Accenture describes as “the virtual company mall.” In Accenture’s words, the virtual mall will comprise a cloud-based set of pre-approved private and public “shops” from which internal customers can select goods and services, supported with business logic that guides their purchasing based on policies, preferred suppliers and contracts. But what will it take to for this virtual supplier mall to become a reality?
Earlier this summer, Accenture published one of the most inventive and daring pieces of research on the future of procurement to date: Procurement’s Next Frontier – The Future Will Give Rise to an Organization of One. Based extensively on interviews with procurement organizations as well as some of the best minds within the firm, it’s anything but the conservative white papers that often come out of consultancies. In fact, I would go so far as to say it’s daring – and very daring for Accenture! Authored by Kai Nowosel, Kris Timmermans and Abigail Terrill, the paper argues that procurement will fundamentally change in structure, integration and digital enablement. Central to the argument of how the new procurement organization will operate is an evolution of technology.
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. Our snap poll simply asks your take on 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. But let's back up – how do we define a "modernist" procurement organization exactly? Read on...
Over on Chief Procurement Officer, we recently began a countdown series of the top 17 ways finance can help procurement. Authored by Chief Research Officer Pierre Mitchell, the series, or wish list, is based off a snap poll Spend Matters and the Institute for Supply Management conducted regarding the alignment of procurement and finance organizations within a company. The series hits on the least important to most important ways procurement would like finance's help improving supply and spend management. (No. 1 will be the most important.) So far, Pierre has hit on tips Nos. 17-15. You can read the full articles over on Chief Procurement Officer, or read on and follow the links.
Jason Busch, founder and managing director at Spend Matters, teamed with Vroozi to come up with a new “buying manifesto” for procurement professionals that is not only relevant today but into the future as well. In Declaration of the New Purchasing: A Buying Manifesto, a new, FREE research download, we predict what the future holds for procurement. In support of this collaborative research with Vroozi, Jason started an ongoing series of articles featured on Spend Matters that support this new buying manifesto. The first touches on “Technology in Our Personal Lives.” Check it out here.
We’re in the process of wrapping a joint Spend Matters/ISM snap poll exploring the relationship between finance and procurement, and more specifically, how to get more out of it on a pragmatic level (no one needs another study that just talks about the roots of “misalignment”). As part of the research, we asked participants why procurement should report into finance. Some of the responses include “senior management influence,” “ability to control budget and cash outflows,” and more. Read on to see what participants had to say.
What came first? The controller or the buyer? It’s really a type of chicken and egg question. Without those engaged in procurement (or materials, labor, finished goods, etc.) there would be nothing to sell – for the vast majority of companies – and no books to close. But, of course, without a controller – or a CFO – setting controls and defining budgeting, it would be all but impossible to buy anything, lest the spending be truly off the reservation to start with. Perhaps the more pragmatic and less philosophical question to ask is: What is finance’s role related to influencing procurement?
As the old saying goes, you get what you pay for. The same can be said of recruiting the best procurement talent into an organization. Spend Matters is continuing to feature excerpts from Deloitte’s recently published paper: Procurement Talent Management: Exceptional Outcomes Require Exceptional People. Today we take a glance at Deloitte’s thoughts on the compensation equation. Read on to catch a glimpse at the new research paper and find out why we think compensation matters at all levels of procurement.
Partner enablement and managing indirect spend is a tried and true method for controlling costs. However, direct connectivity still has a ways to go before it gets on the same level as indirect procurement. Pierre Mitchell, chief research officer at Spend Matters, created a nifty checklist for tier-1 manufacturers and procurement professionals to follow in order to execute direct connectivity. Direct Procurement Execution: What’s Changing? is now available for FREE download, but only for a limited time. Be sure to secure your copy today before it goes back behind the PRO paywall!
Our exploration of Deloitte’s paper Procurement Talent Management: Exceptional Outcomes Require Exceptional People continues today with exploring the concept of “virtuous churn” within procurement. Looking at procurement as a “temporary home” within an organization rather than a singular career destination is essential when considering the type of talent structure and program that procurement leadership teams – ideally with the support of HR – want to nurture and build. As the paper states: “Churn can be virtuous – Formal job rotation programs for future senior leadership positions, or even senior finance positions, are increasingly putting procurement and supply chain on the rotation list. What better place to develop commercial, operational, analytical and collaborative skills all in one department?
Not enough has been written on getting the procurement talent equation right or fundamentally changing the function from the inside out. Spend Matters is continuing to feature excerpts from Deloitte’s recently published paper: Procurement Talent Management: Exceptional Outcomes Require Exceptional People. Today we explore Deloitte’s views on mentoring procurement talent. As stated in the paper: “High-potential staff can become high performers by learning both the mechanics and the art of the procurement trade. Anyone can comprehend a process, but invaluable learning can be gained by working alongside highly skilled teachers, mentors, colleagues and trusted third parties in an apprenticeship model. Top chief procurement officers (CPOs) often cite mentors who helped shape their careers and instill the importance of strong execution.