Accenture’s 6 Characteristics of Procurement Mastery

Add comment May 30th, 2007 David Bush - Iasta

Accenture recently released a thirty-two page white-paper (brochure) entitled High performance through procurement: Accenture research and insights into procurement performance mastery which defined six characteristics of procurement mastery that are quite interesting since five of them are really sourcing characteristics. The six characteristics defined by the report are:

• Strategy
  Strategic Sourcing is all about a good strategy.
• Sourcing & Category Management
  Good strategic sourcing generally has a strategy for each individual category.
• Requisition to Pay
  This is the one (pure) procurement characteristic.
• Supplier Relationship Management
  Good supplier relationship management is critical from the initial RFI through the final delivery.
• Workforce & Organization
  A good sourcing process is well organized and results oriented.
• Technology
  A great sourcing process is built on leading eSourcing technology.

Regardless of the mis-characterization of the six key characteristics, they are still important because Accenture has found that:

• Procurement Masters excel across the board and exceed the survey average in each of these characteristics.
• Procurement Masters achieve higher savings.
  Procurement masters save 10 times as much as it costs them to operate their procurement organizations, as compared to low performers that save only 4 times as much.
• Procurement Masters face fewer organizational challenges.

In other words, Procurement Masters tend to save two and a half times as much money, which is very significant.

Furthermore, the study on which the white-paper was based also found the following key sourcing and category management capabilities:

• Centrally Led Category Management Structure
• Best-in-Class Structure and Process
• Focused Sourcing Analyst Pool
• Maximum Leverage of Global Sourcing
• Value Tracking and Budget Integration

and the following key supplier relationship management capabilities:

• Supply-base Segmentation Approach
• Partnering with Key Suppliers
• Proactive Management of Contracts
• Automated Tracking / Reporting of Supplier Performance

which provide some tips for those looking for starting points to improve their category management strategies or supplier relationship management capabilities.

Entry Filed under: Analysts/Research, General, Supply Management Best Practices