Procurian and the “New Procurement” – what do they mean?

ICG Commerce has now fully transitioned to its new name, Procurian. We explained here the significance of this, and also started a discussion of their new USP / slogan; “The New Procurement. Built”.

Kristen Knouft, Marketing VP at Procurian

What exactly do they mean by this?

As we explained last time, the “Built” element refers to the fact that they have already in place a strong infrastructure of people, market intelligence, technology and process,  so that any new client can immediately take advantage of this. These infrastructure “layers” cover a wide range of category expertise, including direct materials, IT, Marketing, Professional Services, Energy etc.

Having this in place already should lead to more rapid value improvements and benefits for clients than would be possible if Procurian were having to build and implement a bespoke solutions each time.

I’ve been to their head office in King of Prussia and it looks like a very professional and effective set-up. You can see why clients visiting would be impressed.  What about clients in Europe though – that’s not always quite such as easy sell, when your deep category experts are 3000 miles and 6 hours time difference away?  While they are picking up business in terms of European arms of US clients, if they want to become a serous competitor this side of the Atlantic, one imagines that some further investment in infrastructure – or acquisition – might be necessary.

What about the “New”? That’s where it gets a little less clear. Procurian has trademarked the expression and defines it like this - “The New ProcurementTM is a new standard of procurement excellence that fuels enterprise growth and delivers measurable earnings impact”.

When you get into it, what they are doing is laying out a vision of best in class procurement, in particular an approach that sees the function as more than purely cost focused. The function should also have a wider business role, they suggest – I don’t think many of us would argue about that!

They describe six principles for “The New ProcurementTM”

  • Address 100% of spend globally
  • Support Sustainability and Corporate Social Responsibility Objectives
  • Apply Real-time market intelligence
  • Deliver realized savings and continuously optimize spend
  • Enable agility and mitigate risk
  • Fuel growth

It’s that last principle that really starts to get interesting and “new”. It is explained like this:

Fuel growth - Supports the company’s broader growth strategies and objectives by driving and encouraging supplier product innovations in both how we buy and the outcomes we bring to stakeholders. The New Procurement also delivers savings that can be reinvested in innovation and support growth initiatives such as expansion into new markets and or Mergers & Acquisitions, by identifying savings synergies during due diligence and then ensuring that those savings are actually realized post-integration.

If procurement can get into work that drives the organisation’s top line through supplier innovation (while not disregarding the bottom line and cost management), and contribute to M & A type activities, then that would be a “new” step for all but a very small number of firms. So perhaps “The New ProcurementTM ” isn’t just a marketing slogan.

 

First Voice

  1. Kristen Knouft:

    Peter, I think you have described “The New Procurement” quite well. While we don’t claim to have invented all of these principles, or that each are “new” in their own right, we believe they collectively represent a new standard of excellence that we and indeed all organizations must aspire to in order to meet the needs of businesses today.

    With regard to effectively meeting these needs in Europe, we wholeheartedly agree that you can’t rely on experts 3,000 miles away. That’s why we’ve established two solution centers to support Europe – one in London and one in Prague. Across our European centers you would see more than 120 local supply market experts (who collectively speak 21 languages) including dedicated category sourcing, contracting and buying specialists. These experts utilize the same sophisticated tools, information and processes that you saw in the US. We would welcome the opportunity to have you to either office and show you our local capabilities!

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