Webinar Notes: The New Rules of Supply Management
The week’s featured events is ‘The New Rules of Supply Management’ hosted by ISM and presented by Ardent Partners and Ariba, with a client case study from SunTrust Bank woven in.
In an ever-evolving environment, we have to constantly revisit our processes and practices to make sure they are up to par. In this webinar, the speakers addressed facing economic uncertainty with relatively new tools such as business networks and social technologies. For every opportunity to collaborate online, whether with colleagues or suppliers, it seems that there is a reason to hold back – because you never know where information will end up once it is posted. That being said, we have to review our opinions with some kind of regularity to make sure we don’t get left behind just because it is more comfortable to continue on as we have in the past.
The changes being seen in procurement are being driven in part by overarching external factors such as global volatility, natural disasters, and a focus on sustainability.
- The CFO and the CPO should be “BFF”s – remember that other functions may be going through their own transformation/evolution at the same time as procurement. Identifying and understanding their external pressures will help both sides collaborate. Both groups exist to support the rest of the organization and can accomplish more by working together.
- Suppliers can help you find more savings – Unless your company has completely corned the market on innovation (which you haven’t) you have to look at your strategic partners to innovate, and suppliers are a key component of this. Most suppliers really do understand their category of spend better than we do. Engage with them to find out how they can best support you.
- There are no sacred cows – looking at the percentage of spend procurement is influencing today (in any number of ways) as a part of the whole. There are no categories where procurement is unable to add value. According to research done by Ardent Partners, best-in-class procurement groups are managing at least 85% of the organization’s spend.
- Business networks have become the natural disrupters to drive inter-enterprise collaboration – the core value proposition is focused on efficiency: connecting large numbers of trading partners and their transactions. Some networks have reached the point where the network benefits are being felt. They are able to support more than transactions, extending into communication and collaboration around those transactions, both reducing time to issue resolution and supporting forward-looking discussions.
- The speed of innovation can work against incumbents – the expression ‘here today, gone tomorrow’ relates to leaders in consumer markets just as much as in the B2B world. It is becoming harder for companies to dominate a market for as long as they used to. Staying with an incumbent supplier for an extended period of time may mean that you are overlooking or simply losing out on new solutions.
- Opportunity abounds in the procurement department – depending on the organization you are working in, this may mean that there are opportunities to take on more responsibility or to build skills in an area where you don’t have previous experience, simply because the work needs to be done and there is no one currently in house to take it on. Even if you didn’t set out to have a career in procurement, this is a great time to make a long-term commitment.
- It all starts with spend visibility – supports the analysis and insight required to make a material difference in the spend that procurement brings under management. It also supports appropriate resource allocation and budgets for solutions and skills development.
- If executives don’t care about it, stop focusing on it – trust that their perspective allows them to see which initiatives will make the biggest improvements in margin. If there are parts of procurement’s strategic plan that are not contributing to the company’s competitive position, they need to be re-evaluated in s larger context. If your executives don’t think you are successful, you are not successful.
- The CPO is on the rise – for examples of corporate leaders that have come from backgrounds in procurement and supply chain, including Apple’s Tim Cook, visit CPORising.com.
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