Efficient or Effective – How Would You Rate Your Sourcing Process?
Over the past year I have asked sourcing professionals to rate their sourcing process as efficient or effective.
Please keep in mind that most people that I meet are looking to improve their process. Even the ones that aren’t specifically looking want better results.
Sourcing pros can be a bit defensive about their process and this is understandable.
In a recent survey I read, only 40% of CPOs believe that they have a seat at the table.
When I think of efficient systems: organized, methodical and orderly comes to mind.
To me, effective means producing the intended result.
Here are some of the ways that sourcing systems have been described to me:
- Delivers savings but time consuming
- Organized chaos
- Works great for recurring projects
- Not the best but it works
Given the opportunity, people want to get better even if their desire is based on purely personal reasons.
Procurement professionals are effective. Producing savings is a tangible goal. Most would love to be more efficient but given the choice will choose dollars over time.
It is a lot easier to show budget savings then demonstrating what was done with the time saved.
What would you do if you could cut the time required to complete an RFP event by 25% or more?
Many people struggle with this concept. Tim Ferriss writes about this in his popular book “The 4-Hour Workweek”.
There is a comfort in having a full day, even if you are exhausted when you get home.
At some point, a company will realize that change is required if they are to continue to prosper.
I met with a rapidly-expanding construction company last week that is effective in getting bids submitted and then completing the work.
They do want to be more efficient, so they can handle more bids and work, but they have a couple of other issues that are more important to solve.
The volume of communication on a construction project is enormous and a subcontractor can claim that they didn’t get an addendum. This almost always occurs during the project and the increase in risk and negative impact on profit can be huge.
They realize that they need a system that will keep all communications in one place and requires each subcontractor or supplier to acknowledge every addendum. The system needs to provide an audit trail of this.
This will reduce risk and increase profits for them.
I like to refer to this as “one version of the truth”.
Sounds simple enough but you can’t do this with email or if you allow backdoor calls and emails.
This is not a hard issue to solve in my experience.
The company is interested in all the other benefits of a system that can provide analysis, tracking and time savings.
Those are icing on the cake and will support their profitable growth.
Once they put in the system., they will surely be more efficient.
The key from my perspective is that they will be effective and that will solve the significant issues they have.
Action Step: If you are uncertain where to start the process of change, a procurement professional like myself can provide guidance and expertise to help your organization achieve the results you want.
If you want to go explore this topic in greater detail, please contact me. I invite you to request 30-minute discovery conversation. In my experience the next step will be apparent at the end of the call. I never assume that what I have to offer will be right for everyone, so don’t expect a sales pitch. You can reach me at 973-936-9672.
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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Commit to taking the next step.
Until Next Time, I Wish You Great Success in Your Business and in Your Life