The Point

One of my favorite sales blogs is, ‘The Sales Blog’ written by S. Anthony Iannarino. He is a sales executive and coach that believes in the value sales people can add during the buying process.  Since we are mentioning him this week on the Flip Side, I’d also like to extend our congratulations to him on recently hitting a milestone 1,000 posts.

The eSourcing wiki series this week is about the Benefits of Contract management. There is a very positive story with statistics to back it up on why organizations should choose and implement a process for managing contracts. 

Many organizations have difficulty with contracts in two ways. First is getting it through the contract cycle in the first place to finish the sourcing initiative. The longer that takes, the longer it is until the new pricing, service or program is in place. In Jason Busch's 10 Ways to Drive Procurement Influence, Number 2 is moving sourcing into contracts.

The preface to The Procurement Game Plan by Charles Dominick and Soheila Lunney starts with the question, “Why another procurement/supply management book?”

Good question.

Earlier this week, we discussed the Many Hats a procurement professional wears. With that comes the many skills that are needed. I know the breadth of it can seem daunting. You need to be a good analyst, negotiator, influencer, presenter, and communicator. How does anyone fit all those talents into the same resource? And how do you begin to try to train existing staff as they want to develop in their career?

I always think "indirect spend" is an interesting term. One company's indirect is another's direct. Similar to one person's trash is another's treasure? For example, most companies buy laptops and IT equipment as tools to run their business. Yet IBM and Dell think of it as their "direct" spend to their customers.

Managing the indirect spend and controlling costs make such a huge impact to the bottom line. Technology is changing so quickly, it is getting more and more difficult to manage this area of procurement. By the time a rollout is underway, there is another version or an upgrade available. 

When a sourcing professional is being reviewed or considered for a new position, we often look at their negotiation skills, analytical abilities and sometimes their communication style. However, it is rare when we review their project management expertise. This is critical and often overlooked and underrated. Without it, timelines get stretched and deadlines missed if projects are not managed properly. I myself have been frustrated by others when it becomes apparent they are not capable of developing a plan and following the process to completion. I would imagine you have been too. 

Last night I was on the phone with my favorite daughter (only one as well!) and she was talking about Pinterest which I had never heard of. Then Voila – it seems to be everywhere I look. My first reaction was oh no, not another social media website. I am on overload as it is and can't keep up with Twitter, Facebook, blogs, email, websites. I am sure many people feel the same way. Information overload - how do you know which way to turn? 

Much of the news this week has been reviewing the events of a year ago when a tsunami hit Japan. Like most things of this nature, it seems impossible that a year has passed.  The rebuilding is a massive undertaking and will be years and decades in the making.

This event displayed the risk and exposure that so many companies have within their supply chain. With the globalization of businesses, events around the world can significantly impact operations and profits.

I found this article in Industry Week very appropriate as it discussed the risk and lessons learned over the past year. So many organizations have survived but not many really changed much in the interim. Those that are building a strategy have followed some of what is discussed in this article.

We have all had the persistent sales account manager who is contacting us multiple times weekly or even daily. That can be incredibly annoying. There is also the time that you answer the phone late in the day and wish you hadn't as someone goes into their sales pitch. Been there, done that!!

So what is it that opens the door for the sales person and the procurement professional is welcoming and thankful they did? How do they get that first appointment? 

You have been working on finalizing the award and determining who should get the opportunity to work with you. Have you considered that how you set the RFP up to begin with may have set the stage for that end game? Did you eliminate smaller suppliers due to the size of the bid? Should you have lotted things differently to allow more competition?

When you hear the word "evolution" does it bring you back to your high school days in Biology and discussions of Darwin? Survival of the Fittest? That is where our businesses are these days in the economic climate we find ourselves in. Otherwise, you may falter and get "acquired" by a bigger and faster species!!

So what does Spend Analysis have to do with that? And will it solve all the problems of your world? I don't think there is any magic potion for you. However, there is a great deal of value for utilizing Spend analysis.

Corporate Social Responsibility (CSR) is taken very seriously by many organizations. I know retail food companies that contribute to local food banks, schools and community organizations. This blog by Aberdeen really hit the mark and discusses how BMW has implemented CSR and made it a key differentiator.

I was in a presentation last week and they were talking about the advantages of their offering since it was "in the cloud". That is another way of saying Software as a Service (SaaS). It sounded amazing. All upgrades happen at once, there is not version control issues, you are part of a large family of organizations and so on. The virtues kept going such as the price is more reasonable and very little involvement is needed from your IT organization.  

Many organizations offer bonuses at the end of the calendar year or shortly after their fiscal year end occurs. This is often based on specific growth metrics and savings targets for procurement organizations. I liked this blog as it makes you think about the motivation for high performers and how to retain your staff.

Companies seem to be shifting away from year end bonuses. A few years ago, 73% of companies gave bonuses and now it is down to 57%. Obviously, the economic situation has something to do with that. Many companies that do have minimal amount , more of a token. Where it matters is when it really is based on performance and becomes part of the total compensation package. 

What does your company do? 

Are you a morning person? I happen to be someone who requires very little sleep so I am a morning, noon and night person. Lucky for my family right? They have benefitted from it since I have more hours to get things done or to plan our next adventure! However, there have been some frustrations as I make too much noise while everyone else is trying to sleep in on a Saturday morning!!

One of the events this week that you might have attended was Gartner's webinar about the search for talented leaders to take sourcing and procurement to the next level. Well that is YOU regardless if you are leading one project, a small team or an entire organization.

So what does all that have to do whether you are a morning person or not?

 

We went out to dinner last night as a celebration of our daughter's recent promotion. The restaurant was chosen specifically because they feature locally grown items on their menu. We had an interesting conversation about the virtues of that approach for the environment. Then the flip side was discussed about how many jobs are created by having food choices from other parts of the globe. 

Although we are supposed to be spending the next few weeks resting and planning for 2012, I couldn’t resist taking in one more webinar for 2011. This week’s featured event was based on a research study into the procurement practices of the U.S. Fortune 100 (the top 100 companies in the Fortune 500) conducted by Trading Partners.  You can view the slides here. You can also request a full copy of the research report by emailing This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

For more information about TradingPartners, click here to view their page in our vendor directory.

This week’s Wiki-Wednesday topic is supply management, and you can click here to connect to an excerpt from the article on that topic or to link back to the full page.

Every one of us has been impacted by a merger or acquisition. The day after my husband and I closed on our first house, he was told his position was being eliminated due to a merger. My response was at least they waiting until after the closing went through!!

When I was reading this blog about mergers and acquisitions, it brought to light some areas where procurement can step in and show their value.