A discussion has been running in the Procurement Professionals Group on LinkedIn to explore why do centralised procurement initiatives often promise substantial savings, then fail to deliver to the bottom line? Apart from historically falling short of expectations, we are facing new issues such as increasing emphasis on corporate social responsibility and sustainability. The discussion prompted me to write a short article setting out 5 models for procurement organisation and start another discussion, Continue reading
Today I ask, “How are you to know that your procurement ‘cost saving’ initiative will not deliver to the bottom line?”
Regular readers of my blog will know that, recently, I wrote a series of articles on the reasons why, when many large organisations embark on centralised procurement initiatives with the promise of substantial savings, direct increases in profitability fail to materialize within the business units. Continue reading
A discussion has been running in the Procurement Professionals Group on LinkedIn to explore the reasons why centralised procurement initiatives often promise substantial savings, then fail to deliver to the bottom line. Various contributors have expressed different interpretations of “centralised procurement” which has prompted me to write a short article setting out the five models for procurement organisation. Continue reading
Why Procurement and other organisations’ performance may be missing the mark.
This week I was alerted by Dutch procurement consultant, Robbert den Braber, to a blog by technology sourcing expert, Dr Michael Lamoureux – a critique of an article by Accenture senior manager Kamendran Govender entitled “Command and Supply” about procurement practice to achieve superior supply chain performance.
Another article by freelance writer Stephanie Overby, “Is There a Lack of Innovation From Outsourcers?” reviewed the findings of a 2011 Forrester Research Survey, where 41% of outsourcing clients cited lack of innovation as the biggest challenge with their existing IT services relationships, and quoted Forrester analyst, Jan Erik Aase, “I believe my findings apply to any vendor relationship.”
The articles resonated with my recent blogs “How to Start a Strategic Value-Added Programme” and “How to select suppliers to create value” where I focused on assessing supplier’s capability to collaborate and innovate, to help us optimize existing products/services, and to achieve our desired business outcomes.
Now I aim to stimulate readers to think about why procurement (and other) organisations’ performance may be missing the mark. Continue reading