e-Procurement

Looking at Procurement’s Assets with Fresh Eyes

Sometimes the best ideas are right in front of us. This can be evident when you look at a situation with fresh eyes, much like what the United States Postal Service recently did.

The USPS Revolution

The USPS is a large organization facing unprecedented changes that are challenging long-held assumptions about how to operate efficiently and effectively. Ideas to improve their declining financial situation were mostly variations on past strategies: closing branches, stopping Saturday delivery or raising prices. Not surprisingly, those approaches did little to improve the situation.

But the tide may be about to change. On May 21, the Inspector General of the USPS issued a report with some bold new ideas such as exploring ways to better leverage an under-appreciated asset: their national network of localized offices. Rather than pursue tired old approaches, they are exploring ways to increase the financial services they offer and create new revenue streams without making significant additional investments into infrastructure or personnel.

What is so compelling about this approach is that it took someone thinking about the assets already possessed by the USPS in a different way to see it. Rather than thinking in the context of variations on package and letter delivery, they compiled and evaluated assets of any kind and looked at the value they might represent to any market.

Procurement organizations have a similar opportunity. Rather than expanding procurement’s influence by extending current spend management and negotiation efforts into new categories of spend (the equivalent of stopping Saturday delivery) we should perhaps consider an objective assessment of our assets.

Insight and Analysis

We have had access to spend information and the associated analytical tools for so long that in many cases we’ve forgotten what an asset they really are. We focus on spend analysis’ capabilities from the perspective of procurement use cases, but it can do so much more. There are many operational details embedded in the data we use for demand estimates and savings calculations. Thinking about those details and the systems they come from in a more generalized sense will open the door to brand new opportunities and applications.

For instance, rather than looking at what the company currently spends and what they get in return, why not benchmark total spend amounts, supplier consolidation, and seasonality against best practices for that category in your industry? It is wise to question everything in analysis, including the past consumption patterns that indicate how efficiently that product or service is being used.

What Unique Assets Does Your Procurement Organization Have?

Try answering this question in an open group format. Consider assets you may have forgotten about as well as different ways to use better-known assets. The trick is not to take anything for granted. Something delivering value to one team might also have value to other teams – and that value may be surprisingly high. While it isn’t easy to look at familiar surroundings with fresh eyes, this is just the approach that leaders within procurement need to take if they really want to expand their influence and opportunities.

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