Five Goals for Your Procurement Process – Is Your Organization Seeking the Same Ones?

I find that most organizations are chasing the same goals for their procurement process.

Most people believe that their issues are unique. My experience suggests that there are far more similarities in the challenges procurement groups are trying to solve than differences.

I recognize that there are unique details in getting any goal accomplished and some organizations will face far more challenges.

One example that hinders many organizations it the impact of acquisitions. Most acquired units will continue to use their own systems unless those systems are clearly impacting competitive advantage.

There is one typical exception. The unit being acquired is using offline systems like Excel and email to manage RFPs. If the acquiring company has a system with high internal adoption, then the acquired company will be moved to it.

It is not surprising that the following five goals have priority for most companies I work with:

  1. Enhancing competitive advantage
  2. Reducing cycle times
  3. Increasing supplier participation and loyalty
  4. Eliminating manual and workaround processes
  5. Increase spend under management and minimize rogue spend

Hard to find fault with this list. In fact, you might suggest that these are sub goals of strengthening the supply chain and I would agree.

If you can fix one of these, the results will be significant. If you can fix all of them, you may work yourself out of a job!

If you have read some of my posts, you will know that I am a believer in asking people at all levels for recommendations to improve the process.

If you are willing to do that, let me suggest a question to begin your evaluation.

Do you have any tools that are not being used or being used infrequently?

Another one to consider – What tools do you use extensively?

The follow up questions should reveal why tools are or are not being used.

I love stuff that works. Imagine life without GPS.

On the other hand, when people get frustrated they look for an easier way.

If a tool is too complicated or unwieldy, it shouldn’t be a surprise to find that it isn’t being used.

Don’t you do the same? I know I do and sometimes fixing the issue seems to be a bigger deal than using the workaround.

Making changes in internal processes will improve performance but that may only take you so far.

Whole industries have been created because someone had the vision to create a best-of-breed solution that created a significant competitive advantage.

As you evaluate your needs, consider that you can put everything under the same portal. This has some appeal, but I haven’t seen a system yet that has best-of-breed throughout. If there was, every other company would be out of business.

There are many solutions that are best-of-breed. Many can easily bolt onto your existing system or replace it.

Most companies are choosing this approach because it allows them to meet one or more of their goals efficiently and effectively.

If you read my post on efficient or effective last week you will understand why this approach works.

One last thought. Things will change. Do you really want to put all your eggs in a very large basket?

If a best-of-breed suddenly isn’t, replacing it will be far easier than dismantling an end-to-end solution.

We can all get better and it will likely happen if we look to improve 1% today and again tomorrow. If that is your goal every day, 2018 will be your best year ever.

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.

You Won’t Drift to Success©

Commit to taking the next step.

Until Next Time, I Wish You Great Success in Your Business and in Your Life

Mike Jeffries