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 […]
Who Should Pay for Procurement Events?
When it comes to the technology and the labor necessary to purchase something (either from a catalog or with a reverse auction), who should pay for procurement events? Should it be the buyer or should it be the supplier? Logically, we know that the buyer is going to pay one way or the other. Either […]
Why Do We Have a Procurement Department?
It’s an interesting question that we don’t ask often enough: why do organizations have a procurement department? Speaking with a supplier recently, he told me that his company refuses to participate in RFPs. This isn’t because he is afraid of competing. He has a compelling solution that creates real value for his clients, priced fairly. […]
What Is Elastic Procurement™?
What is elastic procurement™ and who should care? CIOs will recognize the word “elastic” from cloud computing. 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. Before Amazon Web Services or Microsoft […]
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. […]
What Is the ROI of a Procurement System?
When making any kind of a decision about digital transformation, people like to talk about the Return on Investment (ROI). What is the ROI of a procurement system? How can we think quantitatively and qualitatively about the costs and benefits? Imagine Betty Buyer. Her CFO tasked her with finding a new procurement system to replace […]
How Does Bureaucracy Affect Procurement?
Bureaucracy, for all its intent to protect the buyer, ends up hurting the buyer by limiting competition far more than it protects the buyer from bad actors.
Everything Is Sourcing
Sourcing is matching: finding the best solution to a problem.