Procurement Insights from Nitor

Just like people, Procurement organizations are at different points on their continuous improvement journey. People rely on friends, classes, self-help books, mentors, and family to help them identify opportunities for growth and improvement. Where would a Procurement organization go to help them identify opportunities and actions required to continue on their journey? 

Some companies use industry benchmarks and roundtables, or work with peers at other companies to see how they compare. But what does that really provide? A couple of data points that tell them they could be better. That probably isn’t breaking news if the questions are already being asked and it certainly doesn’t provide an actionable roadmap to sustainability.

When the CFO states that your organization needs to save money, you listen! When your supervisor makes a “suggestion,” you listen! When your spouse tells you what he/she wants for an anniversary gift, you listen! When your favorite song plays on the radio, you listen!

When data speaks; DO YOU LISTEN?

An earlier blog posting, “Finding Opportunities in Spend Analysis” (May 24, 2016), focused on the mechanics of spend analysis in detail. As you go through these mechanics and perform the activities associated with sound spend data analysis, ask yourself the question, “What is the data saying?” or “Am I letting the data speak?” All too often, we don’t ask those questions and drive toward a pre-fixed solution regardless of what the data is actually telling us. Or worse, we force the data to fit a pre-determined sourcing strategy. Strategic Sourcing approaches are guided by the data and our ability to interpret the data, not the other way around. Remember, the key is to turn data into useful information.

In Western astrology, it is believed the universe is formed by four Elements: earth, air, fire and water. 

 Each of the four contains its own unique and beneficial properties within itself and when they work together they create one perfectly formed universe.

The same is true with the Source-to-Pay environment.  Each Element is individually important and valuable to create and /or deliver value. However, when all the Elements across the Source-to-Pay spectrum work together, a holistic and integrated best-in-class Procurement organization is enabled.