2023 is going to be a game-changer for the truly advanced Procurement team, and it is going to be a nightmare for mediocre ones. Why? Well, almost everybody is apprehensive about the 2023 economic scenario. Weakening consumer demand and lesser sales revenue would mean additional pressure on cost optimization (and hence procurement) for margin improvement. This, combined with the Supply chain crisis and inflation, is forming the Bermuda Triangle for Procurement in 2023. Cost s

1) Identify suppliers and categories where you can play & make strategic changes and product innovations 2) Data & Digitization have uplifted the Procurement Skillset Requirement. If you are not asking for both while hiring your team, you are rooting for mediocrity 3) Look for local optimization opportunities. This should be done iteratively & not once-off 4) Specificity: Develop specific knowledge about your category, new process or cost modelling. This can not be taught or

What is your roadmap to deliver 5% EBITDA margins in 2023? The top 1% of Procurement CPOs are solving big challenges of 2023 and beyond, whereas the rest of the 99% are preparing for "keeping the lights on" as a priority! This is how I will set my goals for 2023 1.) Priority Areas for Cost Management = 30% 2.) Risk Management and Negotiation Excellence = 20% 3.) Aggressive Automation = 10% 4.) Digital Process Governance = 20% 5.) Sustainability =20% Let me expand on the first

1) Allow Employees to be Entrepreneurs 😎 Instead of shelling out millions on substandard generalist 3rd-party solutions, allow your employees to work on 0-1 problems to solve high-impact solutions for you. There are so many Procurement problems that can be solved with ingenious in-house solutions rather than chasing a shiny conference with pretty presentations. Fund such employees and projects, be the first customer and co-own the equity/revenue share arrangements. 💸 💵I ca

We all have heard about the Pareto principle or the 80/20 rule. However, a bit more effective rule is the Price law. I use this rule (and not Pareto) to analyse my tail spend and find cost-saving opportunities! It states 50% of the output is generated by the square root of the total number of resources that are working or contributing to it. Need examples? Soon it is going to be appraisals! Let’s say you have 9 people in your team. So, according to Price law, 50% of your team

"If we have data, let's look at data. If all we have are opinions, let's go with mine." - James Love, CEO Netscape This post will only resonate with a handful of CPOs. Some might find this impractical, but here are the Top 5 things that you need to remove in 2023 from your Procurement Transformation programs and Be Bold about it. Either be Bold about it or go Home. 1) Stop Being Ok with Mediocrity: - Stop working with Legacy vendors. Read about community reviews and not rely

Here are some more detailed tips for negotiating effectively in a procurement setting: Establish your negotiation team: Determine who will be responsible for negotiating on behalf of your organization. This team should include individuals with relevant expertise and decision-making authority. Determine your negotiation goals: Before entering negotiations, consider what you hope to achieve through the negotiation process. This may include securing a specific price or delivery

Spend analysis, and esourcing platforms are dead. Their teams are out of ideas, and it has been a while since that has been the case. Remove the fancy UI components and their flashy presentations, and look under the hood to see the adoption rates of their features. Most of the buyers will use only 3%~5% features of Spend analysis tools and esourcing platforms. The widely used feature in spend analysis is exporting data to excel so that buyers can do their own dicing and slici

1.) Tools that need more than 3 months of implementation time and end up as visualizations only! 2.) Sourcing process than runs longer than 4 months for complex tenders 3.) Management consulting firms where fee is not linked to success outcome 4.) Category managers who can only do 3Bid 1 buy type of Procurement and have zero insight in category intelligence 5.) Project managers and Generalists. I am not against the idea of having one but I would choose to work with the person

Let me talk about a few overhyped and ridiculously under utilised aspects in procurement Overhyped 1) Solving ESG using platforms: Your teams will end up logging answers to questions. The real activity is still done offline. Stop wasting time and money on “platforms”. Spend it on real on ground activity and community intelligence 2) Chatgpt and LLMs: It’s so good in so many domains (content, programming, general consumer queries) but procurement use cases are still quite fa

"De-Age" your Procurement How to build the right Procurement culture for Millennials? It is becoming tricky to attract and retain a high-quality talent pipeline in Procurement. Extremely difficult. Advanced Procurement CoEs demand niche skillsets. A Procurement category manager who can also code will always be my favourite yardstick (because I am one, and yes, I am bragging here:-P). Coming back to the point, Procurement is not cool enough YET to attract young talent and scal

Want to set up a high-performing Procurement Centre of Excellence that actually works? Here are my recommendations that will save you $300k in consulting dollars! 1) Build Fundamental Units: You MUST have these domains in your CoE a.) Process Efficiency, Governance, Digitization and Change Management : Have 4 dedicated resources here and ensure you get at least ONE data scientist here. Yes! You need one. KPI: 50k Man days saving/year 2.) Data & Dollars Team: In other words, N