On December 14, Spend Matters and KPMG, one the largest IP-infused digital services firms in the world, co-hosted the webinar “How to Drive Procurement Value When You Don’t Have Money, Talent or Time.” The speakers were Pierre Mitchell, Spend Matters managing director and chief research officer, and Dipan Karumsi, US Leader of KPMG’s Procurement and Outsourcing Advisory Practice. Sheena Smith, Spend Matters Chief Strategy Officer, moderated. This piece gives a broad, lightly detailed sketch of the webinar. If you would like to watch or listen to the webinar, please find the recording here.
For the bulk of the webinar, Pierre and Dipan responded to polls which ask participants what they found to be the biggest challenge when it comes to time, money and talent.
Time, budget and talent
Discussion began with ‘time’ and the chosen issues of fragmented data, a lack of integrated tools and excessive bureaucracy. “We often see the lack of integrated systems leading to disconnected processes which lead to valuable time being spent on tactical activities,” Dipan stated. “In our experience across multiple clients, getting end-to-end visibility is a key challenge and one that is undervalued.” The problem this presents is that procurement ends up spending its time getting its processes to work, as opposed to working on tasks that drive the most value. Or, as Pierre summarized, “The biggest cost of procurement quite often is the opportunity costs, wasting your precious time, versus really investing it.” They then went into practices one could implement that would reduce the amount of time wasted.
The second topic focused on procurement’s struggles with budgeting and getting budget allocations. The webinar’s participants broadly agreed the major issue is that procurement is not present in budgetary meetings. This leads to the second issue participants flagged: the budgets are never enough. While budgetary limitations are an eternal issue, Pierre clarified on what the actual value of procurement is: “One thing that gets lost is that procurement’s value creation is ultimately the ability to help stakeholders get more value from their spend, and that can be reducing the magnitude of the spend — either on the cost side or on the volume side — or just getting more value to support what they’re trying to do in terms of their business objectives.” The conversation then expanded to give concrete examples of how procurement does this and of cost cutting measures so that procurement teams can navigate their small budgets.
The conversation then shifted to the issues of talent, specifically how stakeholders do not have access to talent, how procurement does not have proactive talent management and how constrained the operating model for talent is. The biggest thing procurement can do, Dipan and Pierre suggest, is reconsider how they source talent. “You can find talent all over the globe,” Dipan noted. “You don’t have to restrict yourself to one location. Additionally, procurement organizations should work on motivating and cross-training the talent they do have to make them more productive and help with talent shortages.” Pierre also brought up the fact that procurement can also look at suppliers as potential sources of talent as they have been trained on the opposite side of the equation. “Find that talent and hire them for the attitude and certain pieces of the aptitude you can train them up on,” Pierre continued. The conversation then gave attention to strategies to navigate the constraints a lack of talent enforces.
After exhausting these three points, Pierre and Dipan turned to risk, which once only interested banks but now has engrossed businesses everywhere. As important as risk is, however, the newfound focus on it has caused a bottleneck in procurement. “There’s a tendency to ask too many questions,” Dipan explained, “and so the timeframe to onboard suppliers is expanding like you wouldn’t believe. Then there’ a balloon of work with risk-mitigation planning. Where does this bubble of work go? You’ve uncovered the risk. Now you have to manage it.” Such management causes tangles in procurement because, for example, it is not immediately obvious who should manage what or which regulations are important in which circumstances. Moreover, companies chronically underestimate the amount of people needed to manage these concerns and may need to consider managed services or outsourcing to help manage these programs.”
The end of the webinar focused more explicitly on strategies to these pinpoints that procurement teams may not have considered before. Opening this topic, Sheena commented: “I think a lot of people don’t know what they don’t know.” Nor will you know unless you experience the webinar!
If you would like to watch or listen to the entire webinar, follow the link here and register: