Hard to believe half a year has gone by so quickly, but Outsource finds itself once again at a SIG Summit – taking place this time round in delightful (though, today, surprisingly drizzly) Carlsbad, California.
Procurement today is a different game. Once viewed as a back-office task, it has emerged as a key differentiator and driver of business value. And to execute it well requires totally new ways of thinking and acting.
Best-in-class organisations understand this. And they are tapping technology, big data and digital networks to fuel a simple, more collaborative source-to-pay process that is changing the game.
Moving Beyond Savings
The formation of a good sourcing agreement relies on clear thinking and agreement between the parties on what is to be done, why and how. The market and technology are changing so rapidly that the next agreement is likely to bear little resemblance to the last. How to make sure we ask the right questions and not just the obvious of the suppliers and ourselves?
Your mess for less
In days of old, when suppliers were big, profitable and mostly American, the questions to be asked to define what a customer wanted of a new service addressed aspects such as:
I recently posted on LinkedIn an article relating to the outsourcing of innovation, how large corporates were joining up with entrepreneurs and startups in the fashion, cosmetics and lifestyle sectors to form a 'supply chain of innovation'; and what opportunities and threats this type of relationship pose to an entrepreneur and SME from an agility and independence perspective.
Another month, another great Outsource Talks webinar… This week it was my profound pleasure and privilege to welcome Vested’s Kate Vitasek, KPMG’s Don Ryan and ‘Art of Procurement’ host Phil Ideson to the Outsource Talks sofa, where the hour fairly flew by in a wonderful discussion of sourcing business models, GBS, challenges facing CPOs, “two-tier” procurement profession
Sourcing and procurement (S&P) leaders continue to reference efficiency, effectiveness and continuous improvement of operations as a high priority. Most will admit that continuous optimisation is not a destination, rather a journey that has become increasingly complex. Today, an agile S&P organisation that effectively aligns with the needs of the business is critical to establish. S&P organisations want to embrace accelerated decision-making, improve productivity and spend visibility, and implement tighter controls for supplier performance.
Dictation being forced in Afghanistan,
Revolution in South Africa taking a stand,
People in Eurasia on the brink of oppression,
I hope it’s gonna be alright.
‘It’s Alright’, Pet Shop Boys
We often hear stories of business relationships that appeared strong suddenly turning sour. These relationships may even have existed for some time. So what is going on? It is likely acts of opportunism.
The result of the EU referendum will undoubtedly have a profound and long-lasting impact on the entire UK population and is likely to be something that is truly generational. Whether we voted for Remain or for Leave, however, Brits now have to assess where we are and how we maintain our position in the global economy.
Sourcing executives today are all about innovation and adding business value: buying smarter to drive business benefits such as increased customer satisfaction, reduced error rates and insights into product design. In other words, procurement operational strategy aspires to demonstrate alignment with factors driving the success of the business, which is more than just cost takeout.
Who could argue with that?
Another rainy trip up north, I thought to myself, turning on the windshield wipers. A recent phone call from Anne, the head of global purchasing, requesting my participation in reviewing some ideas to build stronger partnerships with their inside-outsourcing service providers (IOSPs), was the reason for the trip. Over my forty years as an IOSP, I’d become very cynical and prejudicial towards purchasing departments. As an IOSP to the auto industry, I’d witnessed countless purchasing initiatives resulting in bankrupting IOSPs due to a complete lack of foresight.
Outsource: Bill, it’s great to see you again here at the SIG Summit. Lots of interesting things have happened recently over at Alsbridge [see our interview with CEO Chip Wagner here]: how have these changes affected what you’ve been doing?
As supply chains become increasingly complex, identifying the legal risks inherent in managing such a widely dispersed network of suppliers, manufacturers and other trading partners is key to spotting issues and being able to solve them as soon as possible. Global supply chains come under threat from a wide range of risks including natural disasters, financial crisis, strikes, and, perhaps a most prominent concern of late, cybercrime and terrorism.
It is likely that no other subject gets as much attention when two companies are entering, or extending, their outsourcing business relationship as the effort to come up with a fair pricing structure. Money is money after all, and money talks. You know the drill by now: the conventional procurement process pits buyers and sellers on opposite sides of the table – and there’s no way around it, right? Wrong!
By design this column has, for the most part, examined the theories and research of academic and economic luminaries that have helped form the basis of modern outsourcing and my own research and development efforts in the realm of collaborative outsourcing.
