Category Archives: Procurement Strategy & Planning

Why Should Procurement Report Into Finance? ISM, Spend Matters, Machiavelli and More

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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.

When Finance Wants to Help Procurement, Start With the Reporting Relationship

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A couple of weeks back, I had the chance to sit through a great presentation from Chris Lynch, CFO of Rio Tinto, in London. Chris spent a good deal of time on his view of procurement and procurement success – and how to make it a success. But more generically, what can finance do to influence procurement? Perhaps the best place to start is where procurement and finance organizations are today. In a recent Spend Matters/ISM snap poll, we asked the question: What is finance’s role related to influencing procurement?

Deloitte on Elevating Procurement Talent: The First 4 steps

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Our exploration of Deloitte’s paper, Procurement Talent Management: Exceptional Outcomes Require Exceptional People, continues today with exploring the introduction of the first “4 steps” Deloitte suggests to elevate the procurement talent game. Spend Matters commentary is included after each step. Find out what Deloitte suggests to attract top talent, from promoting procurement as a sustainable career to constantly working to develop and elevate the most skilled employees.

Deloitte’s Take: Virtuous Churn in Procurement Should be Welcomed, Not Feared

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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?

How to Mentor and Manage Procurement Talent: A View From Deloitte

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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.

Now It’s Time For Implementing the ‘The Big Idea’ in Procurement: Tips From Rio Tinto CFO Chris Lynch

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At the Procurious event in late April in London, Rio Tinto CFO Chris Lynch gave one of the most useful talks I’ve heard to date on implementing big ideas in procurement. We’ve previously explored his thoughts. Today, as we conclude this series, we will discuss how to implement big ideas successfully (remember, few ideas get to this stage, at least those with management- and even board-level support!). Above all, in implementing big ideas, Chris suggests keeping things simple and introducing the bare minimum of complexity into the equation, at least as those from the outside (of procurement) can see it.

The Next Step: Getting Support for ‘The Big Idea’ – Rio Tinto’s CFO Chris Lynch Offers Tips for Procurement

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As our series featuring Rio Tinto’s CFO Chris Lynch on how procurement can contribute “big ideas” to the business continues, we come to the next step in the process of making big ideas stick: “getting support.” Here, Chris offers a number of concrete suggestions. First and foremost, he suggests finding a “big promoter” higher up the corporate hierarchy while recognizing that people at the top are “very time poor.” Because of this, it is critical to think about how this executive patron will look at the idea with very limited time. Here, procurement team members must realize that executives are “always very time poor,” so it is essential to “give them a context.”

Bringing Innovation and Flexibility to Category Management – Category Management 2.0 (Part 3)

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This third and final installment of an exclusive preview of a forthcoming research series sponsored by BravoSolution that we created for our Spend Matters PRO subscribers. Consider it the “chef’s choice” tasting bite that the chef (that would be me) sends out in advance of the full multi-course experience. We hope you enjoyed it. Please contact me if you have any questions on the topic – and be on the lookout for the full version of the pending series. In Part 1 of this 3-part Spend Matters PRO series, we introduced Category Management 2.0 as “The lifecycle management of spend/supply categories that meaningfully impact enterprise performance” and why it’s superior to category sourcing processes locked inside of an n-step sourcing process. In Part 2, we also began discussing some approaches to take your category management processes to the next level. In this installment, we’ll continue the discussion and wrap up with a few closing thoughts.

Coming Up With the Big Idea in Procurement: Lessons from Rio Tinto CFO Chris Lynch

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In late April at the Procurious event in London, Rio Tinto’s CFO Chris Lynch gave a great lecture on how procurement can succeed at implementing big ideas. As we continue to share some of the highlights from his speech, we will talk about the first step Chris observes in making a big idea successful: coming up with a concept itself! When generating the right “big idea,” Chris notes it is important to challenge paradigms through true “intrapreneurship,” (i.e., entrepreneurship inside an existing environment). There should be no shortage of ideas that can come out of procurement, he observes, based on where the function sits.

The VA’s Big Procurement Problem – And Why We Are So Angry About It

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If you are like Spend Matters Chief Research Officer Pierre Mitchell – that is, someone who has years of experience in procurement benchmarking – or even if you are simply just a taxpayer, you are likely to get pretty angry at the news coming out of the Department of Veterans Affairs. As Jan Frye, deputy assistant secretary for acquisition and logistics at the VA, put it: “The VA has and continues to waste millions of dollars by paying excessive prices for goods and services due to breaches of Federal laws.” In an article published today on Public Spend Forum, Pierre cites 9 takeaways of the "alleged culture of lawlessness and chaos at the VA." You can read the article here: Think You Have Procurement Problems? The VA Faces at Least $6 Billion in Maverick Spending.

Why Enterprise-Wide Software Deployments Are Not Always ‘Enterprise-Wise’

Spend Matters welcomes this guest article by Jeffrey Jones, account manager at with CobbleStone Systems Corporation. The thought of an enterprise-wide software deployment is alluring for both sides of the deal. You have the opportunity to employ a transformative and efficient change in the organization. The sales representative has the opportunity to gain recognition from his or her employer and a likely large commission check. Enterprise-wide appears to be a winning strategy from the outset – a silver bullet. Some organizations are able to pull it off without a hitch. Unfortunately, just as many organizations find this strategy ending in gridlock.

More Procurement Myths Debunked on Chief Procurement Officer Website

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Pierre Mitchell, chief research officer, continued his special series of debunking procurement myths over on our Chief Procurement Officer website this week, hitting myths No. 16 and 17. In Myth No. 16, Pierre tackles the belief that ROI is the best metric to use within procurement. And, in Myth No. 17, Pierre talks about why, in some instances, POs are not needed. Sure, an invoice without a PO is annoying, but as Pierre puts it, there is a problem with this supposed best practice.