The ROI of a Product Nobody Uses Is … -100%
When discussing technology used for strategic sourcing such as RFPs, much of the conversation boils down to the solution itself. How much does it cost? How difficult is the implementation? Will it integrate with the ERP system? Will this solution help us get value-for-money (all too often defined as the cheapest solution)? Is the procurement […]
Joint Procurement Does Not Have to Be Slow
Every large sourcing event is now a team event, as we wrote about previously in “Procurement Is a Team Sport,” quoting Gartner: “The typical buying group for a complex B2B solution involves six to 10 decision makers, each armed with four or five pieces of information they’ve gathered independently and must deconflict with the group. […]
In Procurement, Margins Are More Important than Cost Savings
The conventional wisdom about procurement is that cost savings are the fundamental priority. One sees this emphasis all the time. Here is Procurement Magazine referring to the 2023 Hackett Group survey: “Procurement’s main priorities for the year include ensuring supply continuity, combatting inflationary pressures and reducing spend cost.” Who could argue with the importance of […]
Procurement Is Investment
I have had several careers. I started in finance trading foreign exchange options for a bank right after the British Pound fell out of the Exchange Rate Mechanism. This was a great opportunity to learn. It was the blue collar of trading. It was an extension of the money-markets. These weren’t the gods of the […]
Procurement Is the Most Important Function CFOs Neglect
Perhaps it is because they think that the Chief Operating Officer has it covered, but procurement is the most important function Chief Financial Officers neglect. Maybe they think that the Chief Supply Chain Officer (or anyone else) is on the case. Too many CFOs let procurement fall between the cracks. It doesn’t get the attention […]
What Is Hybrid Procurement?
What is hybrid procurement? It is an extension of elastic procurement™. We’ve written about elastic procurement™ here: Elastic procurement™ is a delivery model that is to Big Procurement technology systems what cloud computing was to the corporate data center. It lowers costs, eliminates complexity, and empowers staff. What does this mean? Most companies don’t […]
What Are the Biggest Problems in Procurement?
What are the biggest problems in procurement? There are no shortage of them when you speak with people in different business lines within the organization. Suppliers aren’t enamored with the process, so much as resigned to it. Even procurement staff see it as the “Devil we know.” Here’s a list of some of the key […]
Managing Opportunity Costs Is More Important and More Difficult than Reducing Transactions Costs in Procurement
Why are opportunity costs more important than transactions costs? They’re larger. Why are opportunity costs more difficult to manage than transactions costs? They’re hidden. There is no line item for opportunity costs. There is only foregone revenue or higher costs than what the company could have realized in the future because of decisions made today. […]