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Procurement Strategy

Solving the Global Process Ownership Puzzle: Tying Up Loose Ends [Plus +]

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We kicked off this series on global process ownership (GPO) last month over on our Chief Procurement Officer website. The first parts of this series discussed the concept of global process ownership and its relevance to procurement and then dove down into 2 of the 3 key aspects of GPO: process scope/breadth and organizational scope/breadth (or “reach”). So, you may define a process such as category management to be very broad, and you may adopt it globally across all your business units (and across multiple spend categories), but you may not manage that end-to-end process very well in terms of the “quality” of the process ownership. I'm not talking about process quality in terms of defect rates and such, but more broadly. Let me explain...

Should CPOs Use Consensus Decision Making? Not Necessarily, Says Latest Research [Plus +]

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Is consensus decision making the right approach for CPOs and other executives in leadership positions? Maybe not, according to some recent academic research. The headline finding from the study published in Proceedings of the National Academy of Sciences, is that people tend to regard the views of other members in a group equally, regardless of competence. This "equality bias" then prevents them from making optimum decisions as a group. And, while consensus decision making is seen as a positive approach that motivates staff and helps to get buy-in from our teams and stakeholders in a business context, it may not make the best sense for procurement organizations.

Addressing Supplier Diversity: Engage with HR and Partner with SMWBEs [PRO]

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This is Part 2 of our PRO series that began earlier this week. What should procurement do regarding supplier diversity? There is a clear shared-value benefit for the buy-side to actively finding and engaging with SMWBE firms. We don't need to create artificial reasons to satisfy photo ops and artificial statistical goals. Today's SMWBE is tomorrow's innovative growth success and its acquisition target! For future success, the inherent shared value derived from engaging with SMWBE firms is critical to both companies and country.

Dismantling the Pantheon of Procurement Myths [Plus +]

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In the first part of this multi-part series, we will begin to methodically dismantle the myths and lore that have been tribally developed over the years within procurement that have now become “common wisdom.” No, this will not include something as obvious as dispelling the myth of “procurement is all about reducing vendor prices.” There are many more than that – at least 25 of them, actually. Some you may know. Some you may not. And some you may not agree with it. But, it is important to have the discussion because complacency and the lack of awareness is the real risk.

Building a Business Case for Addressing Complex MRO Spend in Asset-Intensive Industries [PRO]

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Asset-intensive industries such as mining, energy (including oil & gas), utilities, chemicals, heavy equipment, construction and related sectors can meet, exceed or miss earnings expectations based on the availability of key assets and facilities in their portfolio, from plants to rigs. To maximize up-time and availability and to minimize the time to overhaul specific assets, many have invested in specialized solutions to manage plants and other facilities. Yet in the vast majority of cases, organizations have not prioritized specialized procurement solutions that could drive substantial savings, risk reduction and other benefits, sitting alongside asset and facility solutions including Maximo/IBM, SAP PM/MM, IFS, Ventyx, ABB, Oracle Asset Management, Intentia, Infor EAM and others. This Spend Matters PRO brief, the second in a series, explores MRO-specific e-procurement use cases for specialized investment in this area. Today’s analysis centers on building the business case for specialized investment in this area and provides recommendations to organizations on how to get started.

Procurement Lessons From the Global Soap Project [Plus +]

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Last week, we began our 2-part Plus series on the recent ISM national Supply Chain Diversity Summit, held last month in Atlanta. We shared the story of event keynote speaker Derreck Kayongo’s Global Soap Project. Today, we continue this story, covering some of the more important supplier diversity takeaways from the summit and offer our analysis in a subsequent research brief. We also talk more about Derreck’s project, how he got where he is today, how he turned his ideas into a reality and, how organizations can apply these lessons to procurement.

ISM Supply Chain Diversity Summit Dispatch: A “Clean” Lesson from CSR Initiative [Plus +]

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Last month, the Institute for Supply Management held its national Supply Chain Diversity Summit in Atlanta. I will share more from the ISM event later, but let's go directly to my best takeaway from the event – a tangible, economically sound, life-changing CSR initiative. It came from Derreck Kayongo, founder and leader of Global Soap Project – an initiative that transforms recycled, discarded hotel soap into usable soap for Africa and other countries with limited sanitation opportunities. Find out how Derreck made this idea a reality and how it can be used as an example for procurement organizations.

Procurement Organization and Structure – Why It Matters For CPOs [Plus +]

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I spoke earlier this month at a half-day workshop event organized by Oracle and Enrich. The topic was “Future-Proof Procurement – what does the future-proof structure and strategy look like?” In particular, my session looked at the issues around how we structure the procurement function, particularly in large, complex organizations, and how that relates to strategy, culture and operating model. Why does the structure of procurement matter? And how do you design an appropriate structure that aligns with the wider organizational strategy, culture and goals? We answer these questions.

The CPO’s Guide to Lean & Six Sigma – Part 3 (Applying Lean Six Sigma to Procurement) [Plus +]

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In our previous two segments of this series published on our Chief Procurement Officer website (see here and here), we discussed Lean and Six Sigma individually in terms of their history, their approaches and their relationship to each other. In this installment of this series, we drill down into how to begin to apply Lean Six Sigma to procurement. In this Plus post, we define the process of when the Lean is integrated with Six Sigma and applied to supply management.

Services Procurement History: Staffing Firm Dominance Faces a Challenge [PRO]

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In this Spend Matters PRO research brief, Jason Busch, founder and managing director, introduces the ideas behind why Spend Matters believes staffing firms will begin to increasingly share overall contingent market share with alternative models including the direct hire of freelancers/independent contractors, talent marketplaces, individual “out-tasking,” alumni and shared interest pools and related models. We also provide a readiness checklist for procurement organizations increasingly tasked with managing services spend that will offer a quick, honest assessment to show if they are ready (or not) for new models.

Services Procurement History: The Rise of the Staffing Industry Model [PRO]

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By just about anyone’s numbers, the staffing industry still maintains dominant market share when it comes to placing temporary or contingent labor at companies (and often government agencies and departments). In this multi-part Spend Matters PRO analysis, Jason Busch, founder and managing director, takes a look at the growth of the temporary labor market and how staffing firms emerged as a dominant model – and the context with which they accelerated their growth in recent decades. Finally, he introduces the ideas behind why Spend Matters believes staffing firms will begin to increasingly share overall contingent market share with freelancer models, talent marketplaces, alumni and shared interest pools, independent contractors/consultants and related models in the coming decades and what this means for procurement organizations increasingly tasked with managing services spend.

ERP and P2P Integration: Key Success Factors For Successful Implementations [PRO]

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In this Spend Matters PRO research brief, P2P Lead Analyst Xavier Olivera considers the many lessons learned in his work implementing and integrating e-procurement and P2P systems to core financials – as well as the results of our recent research in the area and why companies continually do not take enough time to consider ERP integration strategies. We also recommend steps to steer organizations through successful cloud P2P-to-ERP integrations. Last, we cover key success factors to consider during integration strategy development.