A New CPO Mantra: Think Strategically, Act Tactically

Charlotte Sutton
Charlotte Sutton,
Even procurement leaders with a clear end-to-end Spend Control vision are recognising that the war against excess cost and risk is generally won one battle at a time.
Even procurement leaders with a clear end-to-end Spend Control vision are recognising that the war against excess cost and risk is generally won one battle at a time. Nothing big is ever accomplished in ‘one fell swoop’ and world-class Spend Control is a big thing.

Procurement professionals are often frustrated by the difficulty of getting their organisation to see and understand the bigger picture of Procurement. Most of the procurement professionals we work with understand that the education process is part of their job and that they must get reasonably good at it to be fully successful. They understand that they must start by building a close working relationship with their CFO and then work through the senior management team and organisation. But many procurement professionals are also seeing a couple of important things:
  • Many important aspects of Spend Control are within Procurement’s remit
  • The entire source-to-contract process is pretty much controlled by Procurement (or by Procurement-led cross-functional teams in some organisations).
  • So Procurement CAN take the initiative to streamline and improve their own processes so as to a) add capacity for more value-added activities such as sourcing and agreement creation, and b) increase the effectiveness with which they deliver supplier, contract and catalogue information to the organisation’s purchase-to-pay environment.

Going after organisation-wide end-to-end Spend Control is like a D-Day initiative
You have to concentrate your efforts in key areas in order to gain beachheads that will enable you to expand your hold until you have the entire geography covered. (OK – it’s not a war, exactly, but you get the point).

A strategic Spend Control initiative that seems quite daunting when viewed as a whole can be very naturally broken down into small, manageable segments using key dimensions:
  • Spend categories
  • Supplier Adoption
  • Organisational Deployment
  • Business Processes - Source-to-Contract (S2C) and Purchase-to-Pay (P2P)

For instance, one initiative might tackle only a) IT products, b) from contract management through a ‘quick-quote’ purchase workflow within c) central offices. That’s a manageable scope. Once that is in place, the process can be expanded to other parts of the organisation in sequence of importance, or to related categories like IT services, or to additional processes like competitive sourcing.

In this methodical, small-bite way, solid Spend Control processes can be spread across the entire organisation without ever having to run a major project. It just takes vision and perseverance.

Think about your organisation. You know the problem areas. Use these four dimensions to define quick, impactful mini-projects that can ultimately add up to big improvements.

The fact is we are seeing procurement professionals who are using this approach to gain a constant stream of small wins moving more steadily toward their strategic goals than those who are not.

For more 'Think Strategically, Act Tactically' info, download 'Procurement Automation: Key Trends & Hot Topics'