Tuesday Rant: hold the front page, company wants to save money

Could we just agree, that it goes without saying;

  • every company wants to save money from procurement;
  • they are going to do jolly exciting things to achieve that;
  • then they'll report back in a year or so to say it all worked well and look, they've saved lots of dosh.

That would save us all (magazines, blogs etc) from having to report a bunch of meaningless platitudes that we will never be able to validate anyway.  I'm really not getting at Premier Foods, they may really have a world-class programme in place, but it really is getting tedious.  Since CEOs and Communications people discovered that this sort of thing provides a good headline - and presumably it impresses a few naive investors / analysts - it seems that every annual report or half-year announcement comes with an obligatory procurement 'initiative'.

You can see the discussion in the Board room.  "Next year looks a bit dodgy.  What else can we throw in?  Acquisitions? No plans there.  New products?  Not much in the pipeline.  I know, let's have another procurement initiative.  Tell them we're going to save - oh, I don't know, would 5% of our spend sound vaguely credible?  That'll do, bung it in the presentation."

Unless someone (analysts?  pension funds? ) actually starts asking for the programme plans, the savings methodology, and detailed outputs, then it means nothing.   Absolutely nothing.

Voices (2)

  1. David Smith:

    ….sometimes it is ABC Consultancy (or Joe Bloggs – Ace Commercial Strategist) leads Acme Widgets plc to spectactular savings via a procurement revolution (clearly the existing CPO is an idiot, would never have thought of ‘having a plan’ or worse the CEO didn’t know they had one). I’d rather see investor/analysts being advised that an organisation has only delivered modest savings so ‘don’t touch them with a barge pole’.

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