PROCUREMENT… so long a mystery to many
Common questions Procurement professionals hear regularly from sales, internal stakeholders and/or the general population:
❓ What do you do in Procurement
❓ Why do I have to work with you
❓ I already have a supplier, can you please just sign the contract
❓ Why must we competitively bid xyz project
❓ Why do I need KPI’s in the contract or SOW, I know what good looks like
❓ What is the difference between Procurement, Purchasing, Strategic Sourcing and Accounts Payable
❓ What is spend and category management
❓ What is contract management
The list goes on…
Don’t be scared or fooled that Procurement is an “admin” function that just makes me “follow rules”.
“A modern CPO, armed with the right data and tools, has a powerful impact on EBITDA and cash flow from operations, two of the most important financial key performance indicators of every global business.” from Suplari, Inc. CEO, Nikesh Parekh in CFO.com’s recently article Hire a Chief Procurement Officer – You Can/t Afford Not To.
Keep in mind, Procurement as a function is a source of competitive advantage for nearly any and every organization with sales in excess of $50M; if you have sales less than $50M, knowing how to effectively source your goods and services is critical to long term financial success.
You cannot sell or save your way to strong financial performance. Discipline and compliance must be secured on both the sell and buy side of any business, while optimizing internal processes to maximize operational efficiency. The strongest organizations have both high performing sales AND procurement organizations.
You don’t get what you don’t ask for…