THE BUSINESS REVIEW FOR PROCUREMENT LEADERS
Procurement reinvention has stalled in many businesses, argue Booz Allen consultants
Baker and Saporito. Faced with short-term cost pressures and stakeholder indifference,
many CPOs have focused their efforts inwardly on improving functional depth
through initiatives such as
e-procurement, e-sourcing and spend analysis.
While this is understandable and necessary, there is a danger that in the process they pay insufficient attention to functional breadth – engaging the organisation and its suppliers – and fall down a “rabbit hole” that limits their influence on operational decisions and involvement in strategic ones, and may lead eventually to the outsourcing of procurement altogether.
Instead, CPOs need to take a broader view by working hard internally to engage key stakeholders: with finance to overcome the still all-too-common “show me the money” problem and drive savings to the bottom line, and with other functions to manage essential business trade-offs and design new processes for handling them.
Externally, they need to work closely with suppliers to secure preferential access to innovation and capacity, and confront risks by seeking to build greater resilience into their supply chains.
