What is Procurement Value? Tune In To Our Webinar For Some Clues

It has become generally accepted that “procurement is about value, not just savings”. Go to any conference these days and you’ll find plenty of CPOs who will stand up and repeat that with great confidence. But then we still find many organisations where procurement performance is measured heavily (or even solely) on “savings”.

So, something isn’t working properly here. Either we don’t really understand what we mean by “value”, we’re not very good at monitoring or measuring that value, or there is a failure of communications and education in terms of explaining all this to senior stakeholders.

In last week’s webinar, part of the BravoSolution Real World procurement series, and titled “Delivering Value (Not Just Savings)” I got into some of these issues. I don’t claim to have all the answers by any means, I should stress!

But anyway, we looked at how procurement value needs to relate to the wider organisation and its strategy and how the organisation derives “competitive advantage” for itself. We then talked about the different procurement approaches and strategies that can be followed, and how they might relate to those wider organisational issues.

Then we looked at how we might link customer value and procurement value. Many of the goods and services we buy directly feed into our customers’ perception of how our organisation meets their needs. So cost-cutting in many categories can have a negative affect on customer perception; equally, sometimes spending more can provide a huge boost to revenue and profitability, because the customer will perceive more value in the product.

So I talked about how we might segment spend categories based on customer value and internal value – which applies to those spend areas that the customer does not directly perceive as adding value, but are nonetheless important to the organisation.

If any of that sounds interesting, you can still access the webinar here “on demand”.  And if it doesn’t sound interesting, then there are two possibilities. Either you already have “procurement value” completely sussed, in which case please tell us about your approach because we’d love to hear! Or you don’t really care, in which case … well, let’s just say we think this is pretty important stuff.

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