Utilities, Spend Management, and Amtrak

I took the train up to Milwaukee today to speak at Enporion's Buyer Council on procurement and sourcing trends. What struck me most about the practitioners in attendance was the lack of urgency around Spend Management. That's because unlike other markets (e.g., domestic manufacturing), most energy companies and utilities are only under limited cost pressure. And Spend Management, while important to these practitioners, is not top of mind for the most senior executives at the majority of these organizations. It's important, but it’s not a mandate.

The central part of my talk focused on three themes which frequent Spend Matters readers should recognize. First, I argued, Spend Management and supply chain will ultimately become one -- and early trends point to Spend Management practitioners running the combined organizations in many cases.

Second, I talked about how Spend Management is continuing to rise in stature inside organizations, and that it will stay top of mind in the executive suite going forward. In this part of my talk, I discussed the recent SAP / Economist survey that found that executives believe that by 2015, that 60% of companies will have CPOs.

Last, I walked through the rise of supplier performance management and risk management technologies and processes and talked about the benefits of predicting and modeling supplier operational and financial performance.

All in all, a fun chat to an audience that enjoyed sharing success stories and leading practices amongst themselves -- without fear of giving away competitive secrets. But for me, the greatest irony of the day was riding both ways on Amtrak to give a presentation on Spend Management. Why couldn't I escape the irony? Because Amtrak faces an uncertain future in large part thanks to one of the largest sourcing mistakes in recent history. The Nashua Telegraphic article shows that we can chalk up the now infamous Acela embarrassment to Amtrak's failure to deploy Spend Management principles effectively.

-Jason Busch

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