Category Archives: Procurement Strategy & Planning

Procurement Must Ramp Up Risk Management Efforts, New Report States

Supply risk

Procurement organizations are not prioritizing supply chain risk management today, leaving companies unprepared to respond to disruptions, according to a new report from A.T. Kearney and Rapid Ratings. The joint report, titled “Is Your Luck Running Out? Managing Supply Risk in Uncertain Times,” points to data from a 2014 A.T. Kearney study showing an overall lack of risk management practices among procurement organizations.

Software at the Core of Digital Design: Design-Centered Procurement (Part 3)

procurement technology

In our last installment of this series on design-centered procurement, we discussed the importance of good design in products, the design of the supporting supply chain and the design of the supply management function. We used the example of a car design and contrasted the good design of a Tesla compared with the design of the ill-fated Pontiac Aztek. But consider replacing the word “car” with “procurement system.” Traditional software development for procurement applications (or any packaged applications software, for that matter) looks uncannily like that of the Pontiac Aztek. “Feature 500” lists are developed that not only address incremental customer functionality requirements but also throw in new “bells and whistles” designed to keep up with the competitors’ software features, and the preferences of IT industry analysts who put providers on simplistic 2x2 quadrants. Yet the software itself doesn't necessarily align to the procurement outcome of driving business value from better supply management (and demand management as part of this). Why? Here are the biggest issues that we see and how to address them.

Zero-Based Budgeting and the Role of Procurement

Spend Matters welcomes this guest post from Sachin Yadav, of GEP.

Peter Pyhrr proposed a new technique called zero-based budgeting (ZBB) in 1970 to help businesses manage their costs better. It made him very popular in the 1970s, landing him interviews with famous magazines and a lot of consulting work. Although it affects mostly the business stakeholders and budget owners of an organization, every procurement professional needs to know a few things about this process since budgeting can affect existing as well as future contracts.

Empathy, Context and Customer Management: Design-Centered Procurement (Part 2)

tesla

In Part 1 of this series, we introduced the idea of design-centered procurement and how procurement needs to put is “users” (stakeholders) at the core of what it does. The heart of good design isn’t just about aesthetics, but about solving a problem — or lots of problems at once. Those problems are very situational, but there can be many common problems as well. The trick is to tease out the problems that are situational to the environment versus dispositional regarding the person experiencing the problem. Both are valid — you need to understand “where people are coming from.” I know this sounds like an eHarmony line, but the reason why Google/Alphabet is worth nearly half a trillion dollars in market capitalization is due in part because its search results are deeply compatible to your situation and relevant to the problem you’re trying to solve when you go searching (i.e., Google is a finding engine, not a searching engine). If you’ve noticed, your search results, especially on your smartphone, are increasingly freakishly relevant, because Google (and an ecosystem of other mega vendors) is constantly watching you and has a digital profile of you (i.e., who you are) that uses your behaviors (and your attributes) to predict what you want so that it can help you find the solution to your problem — and also serve you up to its advertisers. It all starts with you as the customer and your problem as the context. In the rest of this analysis, we’ll discuss how to do this.

Companies Continue to Focus on Cost Reduction for Business Growth, Deloitte Survey Shows

cost reduction

Companies are increasingly using cost reductions to fund growth initiatives, according to Deloitte’s 2016 Cost Survey Report, a biennial survey looking at cost management and cost improvement trends among U.S.-based Fortune 1000 companies. Of the 210 senior executives surveyed for this year’s report, 57% identified gaining a competitive advantage over competitors and 43% pointed to investment in growth areas as the top drivers of cost reduction.

From Data to Intelligence: The New Frontier for Workforce and Services Procurement Technology Solutions and Practitioners

cognitive computing

Most large enterprise workforce and services procurement programs rely on a vendor management system (VMS) as their primary technology tool or solution. One of the many valuable things that VMS has done for these organizations is to provide a window into data — that is, provide “visibility.” But in recent years, the way technologies look at data has started to evolve. While many other business areas have already begun to adopt the technologies and applications of the new cognitive computing paradigm, for the most part, contingent workforce management and procurement are only at the threshold of adoption.

The Procurement Evolution is Coming

Spend Matters welcomes this sponsored article from Brian Miller, vice president of services at Intesource, a PROACTIS Company.

The procurement function is changing, and fast. The pressure to deliver more value and savings across the entire business — while managing constantly evolving risks and market dynamics — is making procurement more competitive, scrutinized and important than ever before. Over the next few years, the result, according to Deloitte, will be a procurement function that looks vastly different than it does today.

Goodbye Brussels? What Brexit Could Mean for Procurement

Spend Matters welcomes this guest post from Gordon Shishodia, of GEP.

When it was announced in February that Britain would hold a referendum later in the year to decide whether it will leave or stay in the European Union, Europhiles and Eurosceptics alike were quick to vocalize the validity of their respective stances. Certainly, the decision will influence border security, question identity and impact the economy, and the headlines in the ensuing weeks have been filled with the “how wills” and “what ifs” regarding these issues. Rightly or wrongly, the impact on procurement hasn’t yet hit the headlines, but procurement professionals should be vigilant of the ways that Brexit could liberate or thwart their European category strategy.

Procurious Kicks Off Its Big Ideas Summit: Cognitive Procurement and Thinking the Unthinkable

cognitive computing

I’m in London today, attending Procurious’ Big Ideas Summit. This is the second year for the event, which got off to a great start last year — and this year is looking promising as well. The Summit, which generated “1 million social media impressions in 24 hours” in 2015 and is available streaming online again this year, is actually a small, intimate affair in person. With roughly 50 live attendees, many of whom are speaking, it’s easy to talk to anyone attending or follow-up on the words said on stage. We were even given a pre-reading/homework assignment for group discussion. (No comment from me on whether my own assignment is complete yet!)

Moving from Transactional to Strategic: It Starts with Listening

Spend Matters welcomes this guest post from Andrea Brody, senior vice president of global marketing at BravoSolution.

Long seen by peers as the “office of no” — as in, “No, you can’t buy that,” or, “No, that supplier is not on the approved vendor list” — procurement executives have struggled mightily to change how they are viewed and valued. As their organizations shake off the chains of the recession and look to reposition how to achieve sustained growth and long-term value, a new day dawns for procurement. The opportunity to move from being seen solely as a source of cost-cutting to one that enables the overall strategic mission of the organization has long been on the wishlist, and now is the time to seize the moment.

Using Social Collaboration to Engage Procurement Organization Team Members

LinkedIn ProFinder

Employee engagement is a main focus for business leaders in 2016, with more than 80% of U.S. employers in a recent survey ranking engagement as a strategic priority. Engagement has been shown to increase employee retention rates — something that is especially critical at a time when many industries are struggling to find and keep skilled talent. But engagement is also clearly something many companies are failing at, according to the new data.