Real World Procurement Webinar – Delivering Value, Not Just Savings

Next Tuesday, 12th December, we have the last in the 2017 BravoSolution Real World Procurement webinar series. I’m going to be talking about Delivering Value (Not Just “Savings”).

This is a really fundamental topic for procurement, and I don’t pretend to have all the answers or magic solutions.  But I’ve been doing a lot of thinking about how we can relate the benefits that come from effective procurement to the wider organisational goals. That is essential if we want to be credible at the highest levels of our organisation.

The focus on “cost savings” has been in some ways a decent starting point to build procurement as a discipline over the last 50 years. It is easy to understand, and has a resonance at Board level. Clearly,  every organisation should look to buy what it needs from the external market at a fair price. Let’s be clear, even if you are buying super-luxury goods (the most expensive materials to make luxury garments perhaps, or the services of the best management consultants in the world), you want to pay the “right” price based on the market and competitive situation. You certainly don’t want to pay more than your competition is paying!

But as the procurement world has moved increasingly to buying services rather than commodity or standard goods, so the idea that cost savings is the best measure for what procurement does has proved unhelpful. You can always find a graphic designer who can work for less – but are they any good? Here’s a consulting firm who will work for £300 a day rather than the £3000 a day that Bain want  - let’s ask them to develop our global merger and acquisition strategy!

And even for those commodity goods, cost savings has its limitations as a goal. During the webinar I’ll tell you a story about my attempts while working at Mars confectionery to reduce the cost of skimmed milk powder!

So we appreciate that procurement value must come from different aspects of what we do. How do we help the organisation achieve its goals, and how do we express and communicate our value, are the vital questions. Because when buying everything from complex services to commodity goods, there is always more to it than simply cost.

These are tricky issues but, as we say, really important ones for procurement. So I hope you will join me and ideally get involved with the discussion as I take you through my thinking next Tuesday. The webinar is live but is repeated twice – at 12 noon UK time, aimed at he European audience, and at 7pm UK time (2pm us East Coast), mainly for the Americas. You can register here.

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