Are YOU subconsciously diluting the value that you deliver in your Company?
The overwhelming reality is that you’re probably doing just that right now! It’s a fact that most procurement activity never maximises the value delivered to the bottom line.
Do you agree? Why do you think that’s the case?
Well it’s not because you’re procurement activities are flawed.
Neither is it, that your negotiation skills are not that good!
In many cases, the deals that you have negotiated are all set to deliver significant bottom line value!
In companies, procurement success is much more determined by YOUR ability to manage four key elements than anything else.
Your ability to manage the desired change. Your drive to optimize your operational processes. Your management of your core supply chain relationships and Your capability to accurately track benefits – these are the ultimate deciding factors.
So I’ll ask the question again:
Are YOU subconsciously diluting the value that you deliver to your company?
Do you get frustrated that the business works against the contracts that you’ve negotiated?
Are you finding that you’re being challenged by your CFO that stated savings are not being realized?
Are your supplier relationships suffering because you’re constantly being challenged to get lower and lower pricing?
Don’t worry, you’re not alone!
It is a fact that most procurement managers are operating in a state of frustration that is compounded by the fact that most don’t believe that they have the where with all to do anything about it – it all feels ‘out of their control!’
Have you ever thought this? Are you thinking like that right now?!
How Can You Ensure That You Deliver Maximum Value in 2016
As we head into the final third of this year, you’re probably starting to think about 2016 and what you need to improve in the next 12 months.
These five stages should help you get the most from their planning process this year. Moreover by integrating the four core elements mentioned about (we discuss these further below), you will be able to maximise the value that you deliver in 2016;
- Identify lessons from the past 12 months: Start by documenting lessons you’ve learned over the past year and the key objectives that you’d like to continue concentrating on through the next 12 months. You’ll need the previous year’s strategy and plan, functional dashboards, and corporate-level information on business needs to help you do this. Review the results to date, talking through key successes and failures, along with their root causes. One common mistake made by procurement teams is to simply continue with a modified version of the previous year’s plan. Instead, make sure you’re putting business results (saving money or making money) first, which may mean taking a different path than the one originally intended.
- Think about internal and external risks and opportunities: Look at the biggest challenges and the biggest opportunities for both the company and your procurement function. For this step, bring external and internal data to the table, including details of industry trends, news stories, or opinions from external consultants, as well as the corporate strategy, mission, and vision. Activities to carry out during this phase include evaluating industry trends, scenario planning, and recording business partners’ strategic priorities. This last task can help you avoid the pitfall of concentrating only on traditional procurement tasks (like negotiating and securing supply agreements) at the expense of the other ways Procurement can help (like innovating with suppliers or exploring collaborative cost-cutting ideas). Upon completing this stage, you should have a preliminary list of strategic priorities and alternatives, as well as a set of assumptions on Procurement’s strengths and weaknesses and external trends, such as supplier safety or quality issues in the news.
- Establish priorities: Next, use your initial list of strategic priorities from the previous stage to choose a core set of strategic initiatives and alternatives, using details from last year’s projects, your internal and external analysis, and your business partners’ strategic plans. Work with internal partners and teams to develop targets and goals based on your strategic priorities, evaluating the risks and opportunities of initiatives you’re considering. After this stage, you should have a prioritised list of strategic initiatives for the coming year, along with a business case supporting them.
- Communicate to business partners: Your next task is to build buy-in for your strategic plan and identify opportunities to work together with business partners to achieve it. You’ll need to develop messages that link Procurement’s strategic priorities with the goals of internal customers, and then communicate these priorities to them. Always demonstrate how your strategic priorities will benefit the enterprise as a whole.
- Set your budget and structure: The final step is to set up a budget, organisational structure, and execution plan to turn strategy into action. Once the organisational structure is in place, allocate resources across activities. Then, communicate priorities to your teams. The final output should be a trackable budget, team assignments, and clear objectives for your staff. Make sure to build flexibility into your plans so you can adjust should needs change.
Although, I’ve titled this post “How to set yourself up for Procurement Success”, I fully accept that success means different things to different people. My definition of success may well be completely opposite to yours.
BUT, that’s absolutely fine.
The important thing is, that however you define success, you have a clarity around what you need to do to achieve it
How Do You Prevent The Dilution Of Value?
I’m sure that you’ve been in situations when the value that you delivered to the company was diluted due to operations not adopting the new contract or suppliers, or your suppliers not being able to provide the promised innovation due to a failure of your internal processes.
The list is endless – I’m sure that you’ll have a lot of ‘war stories’ yourself.
However, it’s one thing to identify the cause, it’s something completely different to actually do something about it.
The fact that you’re still here reading this post means that you’re ready to find a solution. But, I’m sure you’re starting to think about what I’m trying to sell you and worry about the amount of time that all of this will take to put right – time that you just haven’t got, right!
I know exactly how you feel.
Many of my clients have felt exactly the same.
But what they have found is that my approach enables them to deliver significantly more value to their organization than they have typically been able to do previously.
That’s why I’ve created an Advanced Training for you and I want you to have it for Free.
You can get the full scoop here, but here’s a “big picture” look at what’s covered:
- We start by exploring the four core areas for Procurement Success!
- Next, we explore your each area in more detail and discuss proven ways to adapt these core philosophies into your Company!
- Next, you get to try an insight into the core tools and techniques required to maximise the value that you deliver.
- Finally, you will organise yourself for success by creating a detailed action plan that will ensure that you’ll maximise the returns achieved in 2016
The training itself is delivered via three videos that I’ll send to you over the next three days. Each is around 20/30 minutes long and focused on guiding you to implement the approach into your company right now.
Here’s How To Get This, FREE.
First, go here and request it.
Just enter your name and tell me where to send everything and it’s yours.
Like I said, there’s no cost.
So if you’d like to ensure that you can guarantee your future Procurement Success and Maximise the Value that You Deliver to your Company, get this free training now.