Procurement Assessments – Start with Why

Editor's Note: Jim Baehr is Group Leader of Sourcing Strategies Group LLC

Procurement assessments – there's a lot of information available about what a procurement assessment is. There's also lots of information on what a procurement assessment can deliver. There's even more information available on how to do one. But search “why do a Procurement Assessment” and there aren't many “why” results. A bit disappointing as over a year ago SCMR posted a piece I prepared addressing … reasons why a Supply Management leader should consider an assessment.

With gratitude to Simon Sinek for his provocation to ask us WHY, let's try this again and START WITH WHY do an assessment? The following are in no particular order of importance:

1. You're new to your position as a leader and you have little information available to you to make a judgement about the efficiency and effectiveness of your procurement organization

2. There's been an acquisition or merger bringing together two different Procurement groups – how do you know which one does what well?

3. You did an assessment a few years ago and you want to know:
   a. how you are doing in implementing any recommendations of the old assessment?
   b. have you improved based on the recommendations?

4. You did a self-assessment and:
   a. your stakeholders didn't accept the outcomes
   b. you didn't accept the outcomes

5. Your boss told you to … worse, your boss was told by his/her boss to tell you - you need to do an assessment

6. You attended a conference and you came back feeling insecure based on what you heard other Procurement groups are doing and you want to know how well you compare … be careful, there's a big difference between assessing and benchmarking

7. You're looking to spend some available budget monies and you think it would be good to do this … just in case someone ever asks if you have

8. You want to brand, or market your Procurement group to your stakeholders … and, you've heard someone say “your culture is your brand”

9. You view your Procurement group as doing a great job … but, your internal clients view things differently … they're not quite happy with you and your group … lived this one as a practitioner – it's humbling

10. There's not been an assessment of your group … as best you know

11. Things just aren't working well – neither the process nor the people

12. Your looking to implement some new technology – that digital transformation tsunami … when did we stop using the words tidal wave?

There you have it … a dozen or more reasons WHY you should do an assessment of your Procurement group. These aren't made up … have discussed all of them and there's surely more.

Now, let's look at the reasons WHY assessments aren't done:

1. We don't have the time / money

2. We know we're good at what we do

3. Look at how much we're saving

4. Our customers love us

5. We're not planning on implementing any technology … the digital stuff … any time soon

6. We/you don't want to know

It's difficult to believe but those six reasons for WHY NOT, almost overcome WHY.

A little bit more of Mr. Sinek's thinking:

• Every single company and organization on the planet know WHAT they do … no matter how big or small, no matter what industry. Everyone is easily able to describe the products or services a company sells, or the job function they have within that system. WHATs are easy to identify.

• Some companies / people know HOW they do WHAT they do … a “differentiating value proposition”, a “proprietary process” maybe a “unique selling proposition”, HOWs often explain how something is different or better.

• “Very few people or companies can clearly articulate WHY they do WHAT they do.”

Ask any Procurement professional WHY they do WHAT they do - the most likely answer will be – save money!

Agreed, saving money is a primary metric of Procurement success but it's a metric that diminishes over time with re-sourcing and re-contracting. Wouldn't it be better to assess WHAT you do and HOW you do to better understand WHY you do it? And then – go all-out to deliver VALUE!

And, one more point, for those planning to digitally transform - you need to know where you are and why you're there before you can decide where you want to go.

SC
MR