Because the nature of our work keeps our finger on the pulse of procurement executives worldwide, we can identify trends before they become known as trends and share this information with you. We are seeing a developing trend that we need to alert you to.
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Under new, economy-driven pressures, procurement executives are revising their strategic plans to focus more on short-term impact. Of course, you can’t just snap your fingers and have your department do a better job. Better results require a change to business-as-usual.
In order to get some assistance towards better results, procurement executives are planning to make use of the resources available to them, namely training, technology, and consulting services. The better providers of these solutions can help the procurement leader estimate an ROI.
Armed with the right justification, the procurement leader can request and, if lucky, receive funding for these initiatives. But we’ve seen something troubling happen on a few occasions where approval has been granted and want to warn you about it.
Here’s the situation…The procurement director identifies a resource that can help him or her improve results. The procurement director requests and receives approval for an investment in that resource. The procurement director identifies new opportunities to expand the scope of the use of the resource (e.g., deploying the solution in multiple business units instead of just one) and delays engaging the resource while “getting ducks in a row” for the expanded scope. The procurement director requests additional funding for the expanded scope.
And what happens?
The procurement director is not only denied the new funding, but also loses the funding previously approved, having it deferred until the next budget year!
Now, how can those leaders truly drive quick, significant change without any support?
After all, if there was already a silver bullet within the four walls of the department, don’t you think the leader would already be using it?
Sometimes – and this economic environment is one of those times – it is better to start with a limited scope, show results, and then expand the scope. If you have funding, use it before it gets yanked from you.
After all, other departments have their proverbial tin cups out, too, and there is only so much discretionary funding to be distributed across the whole organization. What’s a CFO to think when a department comes to her with an urgent need for funding and you haven’t your money yet?
The answer is simple: the CFO will think that your project must not have been so important after all.
To use a baseball analogy, sometimes it’s better to hit a single and get the winning run on base than to try to hit a home run and end up striking out.
Execute quickly or you may not be able to execute at all.