Does Your Procurement Organization Work Like Great Sports Teams Do?
Great teams in sports have a common set of goals and a process to achieve them.
In my experience, many procurement groups struggle to align their goals with the overall goals of the organization.
They also are left to manage the process with tools that make it difficult to achieve consistent wins.
They may not have a place at the table either or have the strategic support they need to create a significant impact on profits.
I believe there is parallel between procurement organizations that are aligned and have a process and great sports organizations.
- Team sports like professional football and soccer (football in every place but the US) have to continually work to perfect their plays. Timing is critical. It is all about process and knowing what to do in a situation because you have practiced it so often that it becomes automatic.
- Individual talents are on display but it is within the team framework. Talented strikers won’t score if they are not passed the ball in scoring situations. A wide open receiver won’t score a touchdown if the quarterback doesn’t throw it to him.
- They have the tools and facilities they need to perfect their process.
- If you observe great coaches, they all have a system in place. This allows them to replace players with new ones and continue to achieve the same or similar results.
I recently read a study that contained some surprising statistics.
Only 40% of organizations with a purchasing group are using a unified platform. Of the organizations that have a platform, only 40% of the individuals responsible for procurement events are using the platform. Putting these two statistics together means that only 16% of the sourcing events are completed using the platform.
Either I am in the wrong business or I have lifetime job security.
Seriously, there are many barriers to change that can keep an organization from achieving its goals.
Let me paint a picture of a large organization operating in different countries.
- Teams and individuals are working on multiple events utilizing spreadsheets, documents and emails they have created or adapted from past events.
- Their organization has a platform but they find it too cumbersome to use or too difficult to adapt for certain events.
- The process they follow is not fully documented but they know what needs to be done based on experience and past completed events.
- Each event has multiple stakeholders.
- Communications are generally conducted in one language but not all information is translated or available in the that primary language.
Completing successful sourcing events with these challenges will be difficult if not impossible.
Yes, the events will get done but profits will be left on the table and the team will work way too hard to finish each event.
Another significant drawback to this approach is the loss of competitive intelligence when a team member leaves the company. If you have ever tried to decipher a spreadsheet someone else put together or find all the right contacts at suppliers, you know what I mean. Not being able to access all past events for training and development purposes is a waste of company resources.
There is much to be gained from using a unified platform. If your organization has a platform that isn’t being used maybe it isn’t the right platform or maybe more training is needed.
If your organization doesn’t have a platform, moving away from offline tools like Excel and email will produce enormous time efficiencies. The ability to access all past events using a common platform will facilitate increased competition. Lower costs and higher profits will naturally follow.
84% of the sourcing events are still being done using offline tools. This is effectively manual labor.
Great coaches and teams have a process in place that eliminates or at least minimizes inefficiencies.
Excellent systems can produce positive results as soon as they are put in place. Great coaches and systems will take a bit longer to really take hold but is there anything more beautiful than a perfectly executed play?
Action Step: Procurement can provide dramatic results with the right process and tools. If you are uncertain where to start a procurement professional like myself can provide guidance and expertise to help your organization achieve the results you need. If you want to go explore this topic in greater detail, please contact me.
EC Sourcing Group is one of the companies I represent because their tools have been created by dedicated and experienced sourcing professionals. They know the day-to-day challenges your team faces and have built their tools to solve them. If you want to know how, I invite you to request a demo or 30-minute discovery conversation so you can experience the platform, process, people, and tools. You can reach me at 973-936-9672.
Next week I will continue on this same theme so your organization can improve your bottom line.
If you would like to know more ways to reduce costs without changing the way you do business, simply give me a call or send me an email with your contact information and the best time to reach you.
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Think about it.
Until Next Time, I Wish You Great Success in Your Business and in Your Life