Procurement professionals are acutely aware of ROI. And yet, they are as susceptible as other professionals to spend time on activities that don’t yield much. A typical sourcing manager carries a big load of RFPs that he/she is running at any given time. Each one of these projects has its own set of stakeholders and timeline. Requirements are rarely static and evolve as more information is revealed through RFX(s). This can lead to several iterations of information gathering and negotiation before an agreement is ready to be inked. Successful procurement teams are ones who have a mastery of time-saving techniques beyond personal organization techniques. (I do think that every professional should read “7 Habits” and “Getting Things Done”, or equivalent, every January 1st.)
As you head off to your beach vacation, to take a step back to ponder life and work, here are some thoughts on saving time distilled from personal observation and experience, targeted at three roles within a Procurement organization.
Sourcing manager: The single most effective time-saving technique a sourcing manager can use is to ask this question: How much time should we spend on this project? My doctoral advisor used to talk about the “Principle of optimum sloppiness” which states that you should only put in the amount of effort it takes to solve the problem and no more. Imagine buying a car that meets your need, at a good price, in one Saturday afternoon! Doesn’t always work that way but if you’re spending 6 months looking to buy a car, it is probably overkill. Sourcing managers are naturally curious; they can go deep into a project because something looks interesting. Kick-off meeting is a good time to align with the team on how much time stakeholders are willing to spend on the project. Many times clients will want to cast a wide net to identify providers. Unless the team agrees on a time boundary, this can absorb a ton of time. My advice is to quickly home in on 2-3 vendors with input from the team and then shoot to make a decision within an agreed upon timeframe.
Sourcing leader: The main role of a sourcing leader is to coach sourcing managers, ensure high-level alignment and to ensure that sourcing managers are working optimally on the projects in their pipeline. An effective tool for sourcing leaders to help sourcing managers save time is to use an ABC classification for the projects in the group’s pipeline. Some Procurement methodologies give them fancier names like: Strategic Sourcing Event, Tactical Event and Just-do-it, but the central idea is to have a segmentation of projects to establish guidelines on how much effort a project will require. Effective sourcing leaders use this segmentation data in their regular pipeline meetings to recalibrate and direct resources to high ROI activities. In a past role, as a result of calibration in pipeline meetings, we were able to outsource the sourcing activities related to tail-spend, thereby freeing up the experienced sourcing managers’ time for high-impact activities. In my current role, in keeping with business velocity, we selectively renew, or contract with a vendor with which the client has prior relationship, in order to focus on more critical activities.
Finance operations leader: This role has a huge opportunity to help save time, not only for the Procurement organization, but also for all the users of procurement services. Opportunities which I would classify as low-hanging fruit include electronic signature, paperless/touch-less invoice processing and vendor portal. Tools to fully digitize your business are available today and if any of your transactional activities are being conducted manually in paper-based processes, you have an opportunity to transform that area. To illustrate, in a survey of 35+ customers using DocuSign in Procurement, all of them were able to reduce turnaround time by 85% or more. Automated invoice processing and vendor portal can save time for the Procurement team, for business owners, and for suppliers. That’s a win-win-win!
For further reading, I would recommend browsing the SpendMatters site which has a wealth of information on savings time in sourcing specific categories.
What are your time saving tips for Procurement?