E-Sourcing Forum » Transforming the Procurement Function To Remain Competitive

Transforming the Procurement Function To Remain Competitive

November 6th, 2008 at 04:53am David Bush - Iasta

I started getting my AMR newsletters again last week, after an extended outage, probably blamed on spam filters. Of course, the first one I read was by Mickey about procurement transformation in a recessionary environment. It was very informative and mirrors what we see and numerous institutions.

Evaluating your people, processes, and technology to understand where you can find greater value and cost savings as well as improve procurement process acumen and assessment of the appropriate skills to develop your procurement model is paramount in today’s world. Chances are you will need to engage external assistance to reach your desired procurement end state.

Here are three procurement transformation delivery approaches that can be used in the development of your global procurement strategy:

Procurement technology

Consulting and staff augmentation support

Business process outsourcing (BPO)

These are areas that I agree with completely and have seen amazing results from simple technology deployments, small and large consulting teams and full scale outsourcing. All of which, we have been key pieces of with different organizations. On sourcing technology, in particular:

Sourcing technologies automate the processes of RFX, auctions, optimization, and award. Sourcing suites have emerged in the last few years with the additional value of spend analysis, contract management, supplier performance management, sourcing compliance, project management, and product lifecycle management (PLM). These technologies can bring immediate savings of 15% to 20% in real money because of data aggregation and visibility of negotiation information as well as provide weeks of analytical cycle time reduction. With suite functionality, they enhance the workflows of actionable information to contract award, identify real savings opportunities, and provide cost-value tradeoff visibility across the organization.

Fortunately, AMR are big proponents of many of the solutions that we propose. Clearly, we are big believers in them too and have many different client engagements to prove the business case and hone our skills with people, process and technology.

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

1 Comment Add your own

1. Alan Day | February 7th, 2009 at 7:57 am

State of Flux has launched a survey on Supplier Relationship Management (SRM) and it would be great if procurement proffessionals complete it. We know that SRM remains a hot topic for organisations, but creating the business case for change in this area is often challenging. All of us understand intuitively that SRM is the right thing to do, but it is difficult to put absolute values on the benefits that can be achieved through an SRM improvement programme. Because of this we have focused the survey on how organisations approach SRM and their business cases for change, the implementation and overall approach to SRM.

It would be appreciated if you could take 5 to 10 minutes to complete the survey. We will happily provide the results upon completion of the survey and are planning to run some cross organizational workshops to discuss further so happy to invite you to join those.

The link to survey is http://www.stateofflux.co.uk//surveys/srm_survey.aspx

Thanks

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