Building Procurement Credibility – Download Our SNCF Case Study Now

There are some perennial issues in procurement that will probably never go away as long as business exists. One of those is “savings.” How we define savings, how we measure savings, what we do once we have measured them, who takes the credit for them ... the list goes on, and if you want to start an argument with a group of procurement professionals, this is always a good place to start as everyone will have somewhat different views.

We’ve said before here that we don’t believe savings should be the only measure of procurement’s performance. We’ve also said that for some spend categories, it is not a particularly appropriate measure at all. But, in many category spend areas, and many organisations, then of course we should have cost reduction as an objective.

However, procurement’s dirty little secret, for many years, is that we have been very bad at measuring savings. That is true in all sectors, including public and private, although actually some parts of the UK government have actually gone further than most private firms I know in putting some decent rules in place around measurement. In many organisations though, procurement claims some huge number, without much rigour, and nobody asks too many questions – because it is in everyone’s interest not to disturb the status quo too much.

If you don’t understand your “savings” though, there are a number of issues. How good a job are procurement– and indeed the budget holders – really doing in terms of seeking better value? What “savings" should be available to re-invest or go towards increasing the bottom line? What are the drivers of price movements –up and down – and what does this mean for future planning?

We think these are fundamental questions, which is one reason why we have been covering Sievo here for years. They recently started working with us as sponsors, but we first looked at their software some 4 years ago, and found what seemed to be the best tool we’d seen to actually help organisations track, identify, understand and measure savings.

But better than just hearing from the firm themselves or from us, we now have a case study available that explains from the point of view of a real client – SNCF, the huge French railway and transportation business – how they have used the Sievo tool. It’s all about transparency and ultimately, the credibility of the procurement function in SNCF and their ability to work successfully with Finance colleagues. SNCF basically wanted to be able to explain to their colleagues what impact they are having on the organisation's costs; and that needs more than some "estimated" numbers stuck down on an Excel spreadsheet, which is what we see many procurement functions are doing as their attempt to communicate "savings"!

We will be featuring a couple of extracts from the case study here soon, but you can download the document now, free on registration. If you are at all interested in “savings” as a topic – and who isn’t – we think it is well worth ten minutes of your time to have a look at this.

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