If you are a procurement leader, the onus is on you to make a difference. I’m seeing a lot of CPOs getting better results at traditional activities, but is that what we really want? Just meeting and exceeding cost savings goals is a very 1990’s accomplishment.
Here’s a quick questionnaire (Yes = 3 points, Sometimes/Maybe = 2 points, No/Unlikely = 1 point)
- Does your company have a CPO, and does that CPO report to a CXO, giving procurement a seat at the table with the C-Suite?
- Is your organization viewed and minimally funded like a cost center, or more fully funded as a profit center, such as the with the sales organization in your company?
- Do the business units pull you into deals early not because they have to, but because they see the tremendous value that procurement brings to the table?
- Sales people spend 20% of their time in training. Is your organization, who is negotiating with sales, keeping up with this in a fashion that systematically elevates organizational capability?
- Are your procurement professionals adept at driving influence of product and service designs for cost and total cost reductions with the business units?
- Are your procurement professionals trained in how to architect Value Creation negotiation strategies through investigative negotiations, allowing them to achieve greater savings than through traditional supplier profit compression strategies?
- Are you soliciting innovation ideas from your suppliers as a regular course of business, including inviting feedback on every spec and SOW to see if they know of a better way to solve that problem at a lower total cost?
- Have you transformed your procurement processes/templates/tools from end to end to negotiate and contract for PERFORMANCE RESULTS instead of goods & services?
- Do your procurement professionals know how to surgically identify and remove unnecessary costs from the supply chain?
- Are your procurement high level strategies, savings, and accomplishments clearly listed by the CEO in your company’s annual report?
How to score:
25 – 30: World class procurement organization with a CPO that is driving a leadership agenda
20 – 24: Above average procurement organization with CPO leadership results and opportunities.
15 – 20: Improvement required procurement organization with CPO needing to take significant actions to elevate organizational capability.
< 15: Back-office procurement organization with legacy practices and legacy results. Overhaul required on all fronts.
These 10 areas above are the core focus areas of the CPSCM™ Certification Program, which almost half of the Fortune 100 have invested in over the past 5 years.
How did you score, and what are your learnings from taking this quiz?
Now go off and do something wonderful. Be your best!
Omid G. “THE Godfather of Negotiation Planning” ~ Intel Corp
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