Boost Your Procurement Value Engine I wwwjaggaercom

1

BOOST YOUR

How to upgrade effectiveness efficiency and sustainability

PROCUREMENTVALUE ENGINE

B Maltaverne amp M Lamoureux

Boost Your Procurement Value Engine I wwwjaggaercom

2Table of Contents

Table of Contents

The Purpose of Your Procurement Function 3

The Procurement Value Engine 4

Effectiveness and Efficiency 5

The Productivity Plateau 5

Sustainable Productivity 7

Increasing the Value-for-Money (VfM) of Procurement 8

Definition of Value 8

Effective Procurement 9

Efficient Procurement 11

Sustainable Procurement14

Boost Your Procurement Value Engine I wwwjaggaercom

3

The Purpose of Your Procurement Function

A modern procurement function exists to identify and drive organizational value Long gone

are the days when procurementrsquos only role was to process the paperwork that allowed the

manufacturing department to buy the parts it needed to make its product or the back office

to continue the day-to-day accounting

However as we will discuss in this white paper the identification of organizational value which

is the ultimate key to organizational success is not always straight-forward Every organization

is different and every procurement function has a different level of maturity

While every function exists to deliver results not every function takes the time required to

understand the why Not only does this give purpose to the function (and a lot has been

written on the importance of purpose in management) but it also defines the true role of

the function within the organization the what

We live in times where the how also matters It is obvious that delivering results (the what)

to achieve organizational value is key (the why) However how you achieve these results

also matters In procurement the how depends on the level of organizational maturity and

what will have the greatest impact

Value

mgmt

Price

Demand

management

Supply assurance

Total cost of ownership

Source Hackett Group

Right goods

services at the right

time and place

Buyerplanner

Right goods and services

at the right right price

Negotiator

Shift from lowest price

to TCO

Supply expert team leader

project manager

Reduce demand activity compexity

and variability

Spendbudget consultant and relationship

manager

Increase business value derived

from spend

Value Proposition Role of Procurement

Trusted business advisor and change agent

The Purpose of Your Procurement Function

Boost Your Procurement Value Engine I wwwjaggaercom

4

We can measure the maturity of the organization using the hierarchy of supply provided to us

by Hackett But while this specifies what the procurement function can do it doesnrsquot specify

what the procurement function should do

We can therefore define the raison drsquoecirctre of a procurement function as what the procurement

function should do And what should the procurement function do Simply put procurement

should reinforce a companyrsquos Unique Selling Points (USPs) or Unique Value Propositions (UVPs)

and competitive advantage by managing external spend with the appropriate strategy In this

paper we will define a process that can be used to both define and execute the right strategy

for each procurement event

Sustainability

Efficiency

Effectiveness

Efficient

(Doing the things right)

Sustainability

(Continuously)

Effective

(Doing the right things)

The sweet spot

The Procurement Value Engine

To make a comparison with the manufacturing

world procurement is analogous to an

engine The purpose of the engine is to

produce the fuel that powers the vehicle

it is contained within To do so procurement

requires energy The energy among other

things consists of the function itself (the

people) and everything the Procurement

function needs to work (time information

systems etc) The less energy the engine

needs the better

But this is not the whole story The engine

must run and continue to perform at an

optimum level of productivity over time

and do so in a sustainable manner

A best-in-class procurement function is thus

a function whose Value Engine continuously

delivers value (it is sustainable) to other

departments stakeholders (it is effective)

while requiring minimum energy (it is efficient)

The Procurement Value Engine

Boost Your Procurement Value Engine I wwwjaggaercom

5

Input Output

En

erg

y

Process

Fail slowly Excel

Fail fast Survive

Effectiviness

Effi

cie

ncy

Effectiveness and Efficiency

Now that we have defined the Procurement Value Engine it is important to understand what

its key performance indicators (KPIs) are Like any engine the two main KPIs are effectiveness

and efficiency

Effectiveness is about producing an expected result The gap between the target and the

actual result defines the level of performance

Efficiency has nothing to do with the result itself but focuses on what is required in terms

of resources to produce it Therefore ldquothe less the betterrdquo is definitely the objective of

increasing efficiency

The Productivity Plateau

Now that we have identified the two

primary KPIs for the Procurement Value

Engine we can explore how they relate

to each other and what best-in-class

organizations should aim for

As illustrated to the left the Holy Grail

is to be effective AND efficient

It is no big surprise that the way a

company maximizes its return on

investment (ROI) for its Procurement

function is to increase efficiency and

effectiveness However as explained

in a recent article on Spend Mattersrsquo

website Chief Procurement Officer it

is often difficult if not impossible to

simultaneously maximize both Nonetheless as the article points out there is a symbiotic

relationship between effectiveness and efficiency and a failure to grasp this could result in

an organization pursuing a plateau that it might not be able to reach

The Procurement Value Engine

Effectiveness

Efficiency

Boost Your Procurement Value Engine I wwwjaggaercom

2Table of Contents

Table of Contents

The Purpose of Your Procurement Function 3

The Procurement Value Engine 4

Effectiveness and Efficiency 5

The Productivity Plateau 5

Sustainable Productivity 7

Increasing the Value-for-Money (VfM) of Procurement 8

Definition of Value 8

Effective Procurement 9

Efficient Procurement 11

Sustainable Procurement14

Boost Your Procurement Value Engine I wwwjaggaercom

3

The Purpose of Your Procurement Function

A modern procurement function exists to identify and drive organizational value Long gone

are the days when procurementrsquos only role was to process the paperwork that allowed the

manufacturing department to buy the parts it needed to make its product or the back office

to continue the day-to-day accounting

However as we will discuss in this white paper the identification of organizational value which

is the ultimate key to organizational success is not always straight-forward Every organization

is different and every procurement function has a different level of maturity

While every function exists to deliver results not every function takes the time required to

understand the why Not only does this give purpose to the function (and a lot has been

written on the importance of purpose in management) but it also defines the true role of

the function within the organization the what

We live in times where the how also matters It is obvious that delivering results (the what)

to achieve organizational value is key (the why) However how you achieve these results

also matters In procurement the how depends on the level of organizational maturity and

what will have the greatest impact

Value

mgmt

Price

Demand

management

Supply assurance

Total cost of ownership

Source Hackett Group

Right goods

services at the right

time and place

Buyerplanner

Right goods and services

at the right right price

Negotiator

Shift from lowest price

to TCO

Supply expert team leader

project manager

Reduce demand activity compexity

and variability

Spendbudget consultant and relationship

manager

Increase business value derived

from spend

Value Proposition Role of Procurement

Trusted business advisor and change agent

The Purpose of Your Procurement Function

Boost Your Procurement Value Engine I wwwjaggaercom

4

We can measure the maturity of the organization using the hierarchy of supply provided to us

by Hackett But while this specifies what the procurement function can do it doesnrsquot specify

what the procurement function should do

We can therefore define the raison drsquoecirctre of a procurement function as what the procurement

function should do And what should the procurement function do Simply put procurement

should reinforce a companyrsquos Unique Selling Points (USPs) or Unique Value Propositions (UVPs)

and competitive advantage by managing external spend with the appropriate strategy In this

paper we will define a process that can be used to both define and execute the right strategy

for each procurement event

Sustainability

Efficiency

Effectiveness

Efficient

(Doing the things right)

Sustainability

(Continuously)

Effective

(Doing the right things)

The sweet spot

The Procurement Value Engine

To make a comparison with the manufacturing

world procurement is analogous to an

engine The purpose of the engine is to

produce the fuel that powers the vehicle

it is contained within To do so procurement

requires energy The energy among other

things consists of the function itself (the

people) and everything the Procurement

function needs to work (time information

systems etc) The less energy the engine

needs the better

But this is not the whole story The engine

must run and continue to perform at an

optimum level of productivity over time

and do so in a sustainable manner

A best-in-class procurement function is thus

a function whose Value Engine continuously

delivers value (it is sustainable) to other

departments stakeholders (it is effective)

while requiring minimum energy (it is efficient)

The Procurement Value Engine

Boost Your Procurement Value Engine I wwwjaggaercom

5

Input Output

En

erg

y

Process

Fail slowly Excel

Fail fast Survive

Effectiviness

Effi

cie

ncy

Effectiveness and Efficiency

Now that we have defined the Procurement Value Engine it is important to understand what

its key performance indicators (KPIs) are Like any engine the two main KPIs are effectiveness

and efficiency

Effectiveness is about producing an expected result The gap between the target and the

actual result defines the level of performance

Efficiency has nothing to do with the result itself but focuses on what is required in terms

of resources to produce it Therefore ldquothe less the betterrdquo is definitely the objective of

increasing efficiency

The Productivity Plateau

Now that we have identified the two

primary KPIs for the Procurement Value

Engine we can explore how they relate

to each other and what best-in-class

organizations should aim for

As illustrated to the left the Holy Grail

is to be effective AND efficient

It is no big surprise that the way a

company maximizes its return on

investment (ROI) for its Procurement

function is to increase efficiency and

effectiveness However as explained

in a recent article on Spend Mattersrsquo

website Chief Procurement Officer it

is often difficult if not impossible to

simultaneously maximize both Nonetheless as the article points out there is a symbiotic

relationship between effectiveness and efficiency and a failure to grasp this could result in

an organization pursuing a plateau that it might not be able to reach

The Procurement Value Engine

Effectiveness

Efficiency

Boost Your Procurement Value Engine I wwwjaggaercom

3

The Purpose of Your Procurement Function

A modern procurement function exists to identify and drive organizational value Long gone

are the days when procurementrsquos only role was to process the paperwork that allowed the

manufacturing department to buy the parts it needed to make its product or the back office

to continue the day-to-day accounting

However as we will discuss in this white paper the identification of organizational value which

is the ultimate key to organizational success is not always straight-forward Every organization

is different and every procurement function has a different level of maturity

While every function exists to deliver results not every function takes the time required to

understand the why Not only does this give purpose to the function (and a lot has been

written on the importance of purpose in management) but it also defines the true role of

the function within the organization the what

We live in times where the how also matters It is obvious that delivering results (the what)

to achieve organizational value is key (the why) However how you achieve these results

also matters In procurement the how depends on the level of organizational maturity and

what will have the greatest impact

Value

mgmt

Price

Demand

management

Supply assurance

Total cost of ownership

Source Hackett Group

Right goods

services at the right

time and place

Buyerplanner

Right goods and services

at the right right price

Negotiator

Shift from lowest price

to TCO

Supply expert team leader

project manager

Reduce demand activity compexity

and variability

Spendbudget consultant and relationship

manager

Increase business value derived

from spend

Value Proposition Role of Procurement

Trusted business advisor and change agent

The Purpose of Your Procurement Function

Boost Your Procurement Value Engine I wwwjaggaercom

4

We can measure the maturity of the organization using the hierarchy of supply provided to us

by Hackett But while this specifies what the procurement function can do it doesnrsquot specify

what the procurement function should do

We can therefore define the raison drsquoecirctre of a procurement function as what the procurement

function should do And what should the procurement function do Simply put procurement

should reinforce a companyrsquos Unique Selling Points (USPs) or Unique Value Propositions (UVPs)

and competitive advantage by managing external spend with the appropriate strategy In this

paper we will define a process that can be used to both define and execute the right strategy

for each procurement event

Sustainability

Efficiency

Effectiveness

Efficient

(Doing the things right)

Sustainability

(Continuously)

Effective

(Doing the right things)

The sweet spot

The Procurement Value Engine

To make a comparison with the manufacturing

world procurement is analogous to an

engine The purpose of the engine is to

produce the fuel that powers the vehicle

it is contained within To do so procurement

requires energy The energy among other

things consists of the function itself (the

people) and everything the Procurement

function needs to work (time information

systems etc) The less energy the engine

needs the better

But this is not the whole story The engine

must run and continue to perform at an

optimum level of productivity over time

and do so in a sustainable manner

A best-in-class procurement function is thus

a function whose Value Engine continuously

delivers value (it is sustainable) to other

departments stakeholders (it is effective)

while requiring minimum energy (it is efficient)

The Procurement Value Engine

Boost Your Procurement Value Engine I wwwjaggaercom

5

Input Output

En

erg

y

Process

Fail slowly Excel

Fail fast Survive

Effectiviness

Effi

cie

ncy

Effectiveness and Efficiency

Now that we have defined the Procurement Value Engine it is important to understand what

its key performance indicators (KPIs) are Like any engine the two main KPIs are effectiveness

and efficiency

Effectiveness is about producing an expected result The gap between the target and the

actual result defines the level of performance

Efficiency has nothing to do with the result itself but focuses on what is required in terms

of resources to produce it Therefore ldquothe less the betterrdquo is definitely the objective of

increasing efficiency

The Productivity Plateau

Now that we have identified the two

primary KPIs for the Procurement Value

Engine we can explore how they relate

to each other and what best-in-class

organizations should aim for

As illustrated to the left the Holy Grail

is to be effective AND efficient

It is no big surprise that the way a

company maximizes its return on

investment (ROI) for its Procurement

function is to increase efficiency and

effectiveness However as explained

in a recent article on Spend Mattersrsquo

website Chief Procurement Officer it

is often difficult if not impossible to

simultaneously maximize both Nonetheless as the article points out there is a symbiotic

relationship between effectiveness and efficiency and a failure to grasp this could result in

an organization pursuing a plateau that it might not be able to reach

The Procurement Value Engine

Effectiveness

Efficiency

Boost Your Procurement Value Engine I wwwjaggaercom

4

We can measure the maturity of the organization using the hierarchy of supply provided to us

by Hackett But while this specifies what the procurement function can do it doesnrsquot specify

what the procurement function should do

We can therefore define the raison drsquoecirctre of a procurement function as what the procurement

function should do And what should the procurement function do Simply put procurement

should reinforce a companyrsquos Unique Selling Points (USPs) or Unique Value Propositions (UVPs)

and competitive advantage by managing external spend with the appropriate strategy In this

paper we will define a process that can be used to both define and execute the right strategy

for each procurement event

Sustainability

Efficiency

Effectiveness

Efficient

(Doing the things right)

Sustainability

(Continuously)

Effective

(Doing the right things)

The sweet spot

The Procurement Value Engine

To make a comparison with the manufacturing

world procurement is analogous to an

engine The purpose of the engine is to

produce the fuel that powers the vehicle

it is contained within To do so procurement

requires energy The energy among other

things consists of the function itself (the

people) and everything the Procurement

function needs to work (time information

systems etc) The less energy the engine

needs the better

But this is not the whole story The engine

must run and continue to perform at an

optimum level of productivity over time

and do so in a sustainable manner

A best-in-class procurement function is thus

a function whose Value Engine continuously

delivers value (it is sustainable) to other

departments stakeholders (it is effective)

while requiring minimum energy (it is efficient)

The Procurement Value Engine

Boost Your Procurement Value Engine I wwwjaggaercom

5

Input Output

En

erg

y

Process

Fail slowly Excel

Fail fast Survive

Effectiviness

Effi

cie

ncy

Effectiveness and Efficiency

Now that we have defined the Procurement Value Engine it is important to understand what

its key performance indicators (KPIs) are Like any engine the two main KPIs are effectiveness

and efficiency

Effectiveness is about producing an expected result The gap between the target and the

actual result defines the level of performance

Efficiency has nothing to do with the result itself but focuses on what is required in terms

of resources to produce it Therefore ldquothe less the betterrdquo is definitely the objective of

increasing efficiency

The Productivity Plateau

Now that we have identified the two

primary KPIs for the Procurement Value

Engine we can explore how they relate

to each other and what best-in-class

organizations should aim for

As illustrated to the left the Holy Grail

is to be effective AND efficient

It is no big surprise that the way a

company maximizes its return on

investment (ROI) for its Procurement

function is to increase efficiency and

effectiveness However as explained

in a recent article on Spend Mattersrsquo

website Chief Procurement Officer it

is often difficult if not impossible to

simultaneously maximize both Nonetheless as the article points out there is a symbiotic

relationship between effectiveness and efficiency and a failure to grasp this could result in

an organization pursuing a plateau that it might not be able to reach

The Procurement Value Engine

Effectiveness

Efficiency

Boost Your Procurement Value Engine I wwwjaggaercom

5

Input Output

En

erg

y

Process

Fail slowly Excel

Fail fast Survive

Effectiviness

Effi

cie

ncy

Effectiveness and Efficiency

Now that we have defined the Procurement Value Engine it is important to understand what

its key performance indicators (KPIs) are Like any engine the two main KPIs are effectiveness

and efficiency

Effectiveness is about producing an expected result The gap between the target and the

actual result defines the level of performance

Efficiency has nothing to do with the result itself but focuses on what is required in terms

of resources to produce it Therefore ldquothe less the betterrdquo is definitely the objective of

increasing efficiency

The Productivity Plateau

Now that we have identified the two

primary KPIs for the Procurement Value

Engine we can explore how they relate

to each other and what best-in-class

organizations should aim for

As illustrated to the left the Holy Grail

is to be effective AND efficient

It is no big surprise that the way a

company maximizes its return on

investment (ROI) for its Procurement

function is to increase efficiency and

effectiveness However as explained

in a recent article on Spend Mattersrsquo

website Chief Procurement Officer it

is often difficult if not impossible to

simultaneously maximize both Nonetheless as the article points out there is a symbiotic

relationship between effectiveness and efficiency and a failure to grasp this could result in

an organization pursuing a plateau that it might not be able to reach

The Procurement Value Engine

Effectiveness

Efficiency

Efficiency is doing things right

effectiveness is doing the right things

raquo

raquoPeter Drucker Austrian-born American

management consultant educator and

author He has been described as ldquothe

founder of modern managementrdquo

Like Drucker POOL4TOOL was born in

Vienna Austria so we consider him a

real inspiration

Boost Your Procurement Value Engine I wwwjaggaercom

7

With a limited amount of energy (as defined earlier) your organization can only manage a certain

amount of input and produce a certain quantity of result This is where the organization reaches

a productivity plateau To achieve an increase in results (or output) the only solution is to increase

the level of energy which is very often translated as ldquomore peoplerdquo Another article from Spend

Matters based on an APQC study on maverick buying illustrates this point

But is this really the only way to break the productivity plateau

There is another way As described in the article cited above you can ldquouse efficiency to fund

effectivenessrdquo Becoming more efficient will mean for example that people will do things faster

The time freed up by an increase in efficiency can then be used to fuel effectiveness by being

able to do and manage more In procurement a typical example is using the newly available

bandwidth to manage more spend and therefore produce new value incrementally But this

is not enough to reach and maintain the optimal productivity plateau

Sustainable Productivity

The analogy of an engine again helps us to understand this because an engine needs constant

care maintenance and fuel to run It is dynamic For many procurement functions being self-aware

is sometimes very difficult if not impossible because it requires

bull the right dashboard to measure changes in input output gap vs target

bull a lot of energy to gather data and perform the relevant analysis

Therefore in addition to effectiveness and efficiency

the Procurement Value Engine must be sustainable

By sustainable we mean that procurement should

deliver value in the long run not just the short run

This means ensuring that the triad of time cost

and quality is always at its optimum and balanced

This third dimension of the Procurement

Value Engine has two main consequences

bull An approach and culture of continuous

improvement (aka DMAIC) and

bull An understanding of future impacts

in all decisions and actions

(long-termism vs short-termism)

Time

Productivity

2 Cost

6 Talent4 Quality

3 Scope

1 Time

5 Risk

The Procurement Value Engine

Boost Your Procurement Value Engine I wwwjaggaercom

7

With a limited amount of energy (as defined earlier) your organization can only manage a certain

amount of input and produce a certain quantity of result This is where the organization reaches

a productivity plateau To achieve an increase in results (or output) the only solution is to increase

the level of energy which is very often translated as ldquomore peoplerdquo Another article from Spend

Matters based on an APQC study on maverick buying illustrates this point

But is this really the only way to break the productivity plateau

There is another way As described in the article cited above you can ldquouse efficiency to fund

effectivenessrdquo Becoming more efficient will mean for example that people will do things faster

The time freed up by an increase in efficiency can then be used to fuel effectiveness by being

able to do and manage more In procurement a typical example is using the newly available

bandwidth to manage more spend and therefore produce new value incrementally But this

is not enough to reach and maintain the optimal productivity plateau

Sustainable Productivity

The analogy of an engine again helps us to understand this because an engine needs constant

care maintenance and fuel to run It is dynamic For many procurement functions being self-aware

is sometimes very difficult if not impossible because it requires

bull the right dashboard to measure changes in input output gap vs target

bull a lot of energy to gather data and perform the relevant analysis

Therefore in addition to effectiveness and efficiency

the Procurement Value Engine must be sustainable

By sustainable we mean that procurement should

deliver value in the long run not just the short run

This means ensuring that the triad of time cost

and quality is always at its optimum and balanced

This third dimension of the Procurement

Value Engine has two main consequences

bull An approach and culture of continuous

improvement (aka DMAIC) and

bull An understanding of future impacts

in all decisions and actions

(long-termism vs short-termism)

Time

Productivity

2 Cost

6 Talent4 Quality

3 Scope

1 Time

5 Risk

The Procurement Value Engine

Boost Your Procurement Value Engine I wwwjaggaercom

8

Increasing the Value-for-Money (VfM) of Procurement

A better Procurement Engine is one that delivers more value-for-money (VfM) The Value-for-

Money of procurement can be defined as ldquoa utility derived from every purchase or every sum

of money spent Value for money is based not only on the minimum purchase price (economy)

but also on the maximum efficiency and effectiveness of the purchaserdquo1

Therefore VfM applied to procurement is about maximizing value from each dollar invested in the

procurement functionrsquos people process and technology

At a high level the procurement VfM can be described as

VfM levers = Reduce Input + Increase Output + Reduce Energy

Which leads us to the following breakdown

This means that an increase in effectiveness in any of these categories so long as it is not

accompanied by a decrease in effectiveness in another category will generally increase

value for money This breakdown however doesnrsquot answer which increase will bring the

greatest benefit or how procurement can deliver the best value to organizational stakeholders

Definition of Value

Before you can deliver results you need to

know what you are expected to deliver Or

as the well-known negotiation concept puts

it the receiving party defines what value is

not the giver This means that value has to

be determined by and with the ldquoend-userrdquo

of the product or service that procurement

will be sourcing

As the CIPS model for Category Management

shows this is a ldquotop-downrdquo approach that starts

with a companyrsquos vision mission and values

This then cascades to the level of the companyrsquos

overall cross-functional strategy down to the

category level at the end of the funnel

Governance amp Category Mgmt SourcingSupply MgmtPurchase-to-Pay

Vfm = x x+ x x x

Reduce

influence

demand

Decrease

contract

costs

Increase

spend under

management

Increase

compliance

with

contracts

Decrease

order-to-pay

costs

Reduce

usage costs

Reduce

risk

Companyacutes Vision Mission amp Values

Procurement Strategy (Value)

Category Strategy

Category Strategy

Category Strategy

Companyacutes Overall Strategy

Finance

Supply Chain

HR

R amp D

Marketing

Technical

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

9

Obviously this is a function-specific exercise the outcome varies from company to company

(as noted earlier the raison drsquoecirctre of Procurement is to reinforce a companyrsquos USPs) and as

it is often said results may vary based on

bull Market and sector eg B2B B2C public private

bull Industry eg service manufacturing and

bull Localization eg legal requirements

Nevertheless some common elements of relevance could be

bull Cost (performance profitability amp financials) eg price cost Total Cost of Ownership cash

management growth

bull Agility contribute to supply chain rebalancing (buy where you sell) manage market dynamics

(raw materials currencies etc) anticipate impact of disruptive technologies that may impact

make-or-buy decisions andor supply markets contribute to time-to-market improvements

etc or

bull Risk reduction brand protection supply chain disruptions CSR etc

Effective Procurement

Effectiveness is where to start as illustrated in the quote above and in a recent procurement

book Procurement Mojo by Sigi Osagie

It is procurementrsquos job to manage external spending so the key drivers of being effective are

related to the Strategic Sourcing Processes A good start to assessing your current effectiveness

is to look at AT Kearneyrsquos Strategic Sourcing Gemstone

McKinsey amp Company research has confirmed that procurement pays

Companies with high-performing procurement functions consistently out-

perform their rivals on a range of financial indicators and the best com-

panies are building advanced talent management strategies into the very

heart of their procurement organizations Moreover procurement will play

a key role in helping companies cope with the new challenges and oppor-

tunities of our increasingly dynamic global economy

Industry Week ndash Jan 2014

raquoraquo

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

9

Obviously this is a function-specific exercise the outcome varies from company to company

(as noted earlier the raison drsquoecirctre of Procurement is to reinforce a companyrsquos USPs) and as

it is often said results may vary based on

bull Market and sector eg B2B B2C public private

bull Industry eg service manufacturing and

bull Localization eg legal requirements

Nevertheless some common elements of relevance could be

bull Cost (performance profitability amp financials) eg price cost Total Cost of Ownership cash

management growth

bull Agility contribute to supply chain rebalancing (buy where you sell) manage market dynamics

(raw materials currencies etc) anticipate impact of disruptive technologies that may impact

make-or-buy decisions andor supply markets contribute to time-to-market improvements

etc or

bull Risk reduction brand protection supply chain disruptions CSR etc

Effective Procurement

Effectiveness is where to start as illustrated in the quote above and in a recent procurement

book Procurement Mojo by Sigi Osagie

It is procurementrsquos job to manage external spending so the key drivers of being effective are

related to the Strategic Sourcing Processes A good start to assessing your current effectiveness

is to look at AT Kearneyrsquos Strategic Sourcing Gemstone

McKinsey amp Company research has confirmed that procurement pays

Companies with high-performing procurement functions consistently out-

perform their rivals on a range of financial indicators and the best com-

panies are building advanced talent management strategies into the very

heart of their procurement organizations Moreover procurement will play

a key role in helping companies cope with the new challenges and oppor-

tunities of our increasingly dynamic global economy

Industry Week ndash Jan 2014

raquoraquo

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

10

Consolidate number

of suppliers

Aggregate volume accross units

Redistribute volume among

suppliers

Establishdevelop key suppliers

Employ strategic allia

nce

partnerin

g

Examine strategic ldquom

ake v buyrdquo

Conduct product value analysis

Optimise lifecycle costs

Rationalisestandardise

specifications

Substitute materials

Expand geographic supply base

Develop new suppliers

Exploit global supply demand

imbalances

Compare total costs

Model ldquoshould-costsrdquo

Re-negotiate prices

Unbundle pricing

Hold an online auction

Re-engineer joint processes

Support supplier operations improvement

Share productivity gains

Develop integrated supply chain

To increase effectiveness as highlighted in the gemstone above the right measures aim

to manage spend better and achieve more results by

bull Using historical spend to gain knowledge

bull Employing levers to reduce price or cost or eliminate cost and

bull Increasing spend under management to unlock new benefits

The following are examples of effectiveness levers based on the value for money formula

presented earlier in this document

Demand Influence lifecycle cost analysis versus bonus potential

A full lifecycle cost analysis on similar product lines in a category might reveal that two

almost equal cellphone models have significantly different costs and one of the models

should be retired with demand shifted to the other model That said until sales understands

the costs and how it impacts the bottom line and their bonus potential they might keep

selling the higher cost model (instead of the higher profit model)

Spend Under Management (SUM) increase extendible on-line catalog for all types of requisitions

A big reason a lot of spend is not under management at many organizations is because

there is no catalog for many one-off one-time or spot-buy purchase needs (such as extra

office supplies not on the standard contract temporary services promotional items for events

travel services etc) and this spend ends up being requisitioned through e-mail requests made

Exercise Power Create Advantage

Volume

concentratio

n

Product

specification

improvement

Product specification

improvement

Global sourcing

Joint process

improvement

Best-price evaluation

The strategic sourcing

gemstone

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

11

then is not entered in the procurement system until the invoice comes in If the organization

has an extensive catalog where arbitrary items can be created by the organization as needed

all requisitions approvals and spend gets recorded and gets under management

Contract Cost Decrease e-Signature options

Some organizations pay a lot of money couriering contracts back and forth for signature even

when e-Signatures are just as legally binding A platform that is integrated with an e-Signature

service can save the organization time and money allowing it to complete the contract cycle

more expediently

Contract Compliance Increase alerts when documents are due (coming or past)

Organizations are at great risk when insurance certificates certifications releases or

audits are not completed or submitted on time With a platform that tracks when documentary

requirements are due the organization knows when to remind a supplier or take more severe

action (such as halting all orders to the supplier until the issue is corrected) if the documentation

needed is not received in a timely fashion

Usage Cost Decrease packaging improvements

In some industries such as food and beverage and pharmaceutical the packaging of

a dense liquid especially one with a tendency to stick to certain types of packaging

can have a significant impact on the usage cost when there is high waste or expensive

processes are needed to clean the containers for recycling Packaging improvements

that use new types of non-stick packaging can reduce the overall lifecycle costs even

if the packaging is more expensive

Risk Decrease in-transit visibility

A system that allows an organization to track its shipments from the time they leave the

supplierrsquos warehouse to the time they hit the organizationrsquos warehouse with updates

each time a waypoint is met or a (n intermodal) transfer is made with regular updates

helps an organization not only track where itrsquos shipments are but whether or not they

are likely to arrive at the expected time

Order-to-Pay Cost Decrease automatic payment on successful m-way match

Automated m-way match between a purchase order invoice and goods receipt not only

increases efficiency but also increases effectiveness if the system can also automatically

queue invoices that pass the m-way match for payment as this helps both procurement

and accounts payable be more effective in payment and cash flow planning

Efficient Procurement

As already mentioned efficiency can be invested into increasing effectiveness for example

by enabling Procurement to address areas that have been left untouched or sub-optimized

until now because of a lack of capacity In addition efficiency improvements allow

procurement to be more agile and pro-active

This leads to new capabilities and enhancements in cycle times and allows for the following best

practices to be employed which increase efficiency even more

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

12

bull Revisit sourcing lists (preferred suppliers) more than once a year to ensure continuous alignment

between sourcing strategy and needs (especially critical for new product developments)

bull Manage market dynamics better the ability to identify and capture positive market changes

(or mitigate impacts of negative ones) by dynamically going back to market

bull Improved cycle times in spend management processes that enable other support functions

or positively impact the product lifecycle and

bull Reduce savings leakage by transforming identified savings into actual savings realized because

of improvements in contract management

Another aspect of efficiency lies in the tools used by procurement to perform its activities

Efficiency as stated earlier is about how procurement works and in our technological era

it is impossible not to talk about technology Technology plays a key role in efficiency gains

because it is an enabler simplifying a lot of administrative tasks and making process

integration possible

Typical efficiency gains that are specific to using procurement technology include

bull Automation impacting the level of resources needed and cycle times

bull Economies of scale from centralizing information and data management and

bull Knowledge Management (KM) based on centralizing and securing information

while making it more available across geographies (physical or functional)

Volatile markets opportunity or problem

The answer to this question depends on how you manage these challenges The fact

remains that Procurement must operate in the context of volatile markets

Therefore Procurement has to be equipped to cope with this

Part of this equipment is a mechanism to feed Sourcing events with real-time market

information This can be used among other things to track raw material prices from

external sources (eg London Metal Exchange) So when you have an RFQ in addition

to the suppliersrsquo conditions you can check the key price drivers against the current

market This is valuable information to ensure you do not ldquoleave moneyrdquo on the table

andor ask the right questions to suppliers to find ways to optimize conditions for both

parties

Plus having real-time market information allows you to constantly assess past agree-

ments against current conditions and if necessary go back to market easily

How Procurement responds to market changes is part of the broader idea of Procure-

ment agility that is a key differentiator in our world in constant change

For more see here

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

11

then is not entered in the procurement system until the invoice comes in If the organization

has an extensive catalog where arbitrary items can be created by the organization as needed

all requisitions approvals and spend gets recorded and gets under management

Contract Cost Decrease e-Signature options

Some organizations pay a lot of money couriering contracts back and forth for signature even

when e-Signatures are just as legally binding A platform that is integrated with an e-Signature

service can save the organization time and money allowing it to complete the contract cycle

more expediently

Contract Compliance Increase alerts when documents are due (coming or past)

Organizations are at great risk when insurance certificates certifications releases or

audits are not completed or submitted on time With a platform that tracks when documentary

requirements are due the organization knows when to remind a supplier or take more severe

action (such as halting all orders to the supplier until the issue is corrected) if the documentation

needed is not received in a timely fashion

Usage Cost Decrease packaging improvements

In some industries such as food and beverage and pharmaceutical the packaging of

a dense liquid especially one with a tendency to stick to certain types of packaging

can have a significant impact on the usage cost when there is high waste or expensive

processes are needed to clean the containers for recycling Packaging improvements

that use new types of non-stick packaging can reduce the overall lifecycle costs even

if the packaging is more expensive

Risk Decrease in-transit visibility

A system that allows an organization to track its shipments from the time they leave the

supplierrsquos warehouse to the time they hit the organizationrsquos warehouse with updates

each time a waypoint is met or a (n intermodal) transfer is made with regular updates

helps an organization not only track where itrsquos shipments are but whether or not they

are likely to arrive at the expected time

Order-to-Pay Cost Decrease automatic payment on successful m-way match

Automated m-way match between a purchase order invoice and goods receipt not only

increases efficiency but also increases effectiveness if the system can also automatically

queue invoices that pass the m-way match for payment as this helps both procurement

and accounts payable be more effective in payment and cash flow planning

Efficient Procurement

As already mentioned efficiency can be invested into increasing effectiveness for example

by enabling Procurement to address areas that have been left untouched or sub-optimized

until now because of a lack of capacity In addition efficiency improvements allow

procurement to be more agile and pro-active

This leads to new capabilities and enhancements in cycle times and allows for the following best

practices to be employed which increase efficiency even more

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

12

bull Revisit sourcing lists (preferred suppliers) more than once a year to ensure continuous alignment

between sourcing strategy and needs (especially critical for new product developments)

bull Manage market dynamics better the ability to identify and capture positive market changes

(or mitigate impacts of negative ones) by dynamically going back to market

bull Improved cycle times in spend management processes that enable other support functions

or positively impact the product lifecycle and

bull Reduce savings leakage by transforming identified savings into actual savings realized because

of improvements in contract management

Another aspect of efficiency lies in the tools used by procurement to perform its activities

Efficiency as stated earlier is about how procurement works and in our technological era

it is impossible not to talk about technology Technology plays a key role in efficiency gains

because it is an enabler simplifying a lot of administrative tasks and making process

integration possible

Typical efficiency gains that are specific to using procurement technology include

bull Automation impacting the level of resources needed and cycle times

bull Economies of scale from centralizing information and data management and

bull Knowledge Management (KM) based on centralizing and securing information

while making it more available across geographies (physical or functional)

Volatile markets opportunity or problem

The answer to this question depends on how you manage these challenges The fact

remains that Procurement must operate in the context of volatile markets

Therefore Procurement has to be equipped to cope with this

Part of this equipment is a mechanism to feed Sourcing events with real-time market

information This can be used among other things to track raw material prices from

external sources (eg London Metal Exchange) So when you have an RFQ in addition

to the suppliersrsquo conditions you can check the key price drivers against the current

market This is valuable information to ensure you do not ldquoleave moneyrdquo on the table

andor ask the right questions to suppliers to find ways to optimize conditions for both

parties

Plus having real-time market information allows you to constantly assess past agree-

ments against current conditions and if necessary go back to market easily

How Procurement responds to market changes is part of the broader idea of Procure-

ment agility that is a key differentiator in our world in constant change

For more see here

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

12

bull Revisit sourcing lists (preferred suppliers) more than once a year to ensure continuous alignment

between sourcing strategy and needs (especially critical for new product developments)

bull Manage market dynamics better the ability to identify and capture positive market changes

(or mitigate impacts of negative ones) by dynamically going back to market

bull Improved cycle times in spend management processes that enable other support functions

or positively impact the product lifecycle and

bull Reduce savings leakage by transforming identified savings into actual savings realized because

of improvements in contract management

Another aspect of efficiency lies in the tools used by procurement to perform its activities

Efficiency as stated earlier is about how procurement works and in our technological era

it is impossible not to talk about technology Technology plays a key role in efficiency gains

because it is an enabler simplifying a lot of administrative tasks and making process

integration possible

Typical efficiency gains that are specific to using procurement technology include

bull Automation impacting the level of resources needed and cycle times

bull Economies of scale from centralizing information and data management and

bull Knowledge Management (KM) based on centralizing and securing information

while making it more available across geographies (physical or functional)

Volatile markets opportunity or problem

The answer to this question depends on how you manage these challenges The fact

remains that Procurement must operate in the context of volatile markets

Therefore Procurement has to be equipped to cope with this

Part of this equipment is a mechanism to feed Sourcing events with real-time market

information This can be used among other things to track raw material prices from

external sources (eg London Metal Exchange) So when you have an RFQ in addition

to the suppliersrsquo conditions you can check the key price drivers against the current

market This is valuable information to ensure you do not ldquoleave moneyrdquo on the table

andor ask the right questions to suppliers to find ways to optimize conditions for both

parties

Plus having real-time market information allows you to constantly assess past agree-

ments against current conditions and if necessary go back to market easily

How Procurement responds to market changes is part of the broader idea of Procure-

ment agility that is a key differentiator in our world in constant change

For more see here

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

13

In addition to increasing efficiency in your procurement organization technology also enables

suppliers to be more efficient This means that procurement can introduce efficiencies into the

supply chain that it can benefit from This is also an important aspect of the business case for

better supplier onboarding (supplier portals EDI e-Invoicing etc)

But not all technologies are equal when looking at efficiencies Some technologies are more cost

effective than others Remember what Rudzki Smock Katzorke and Stewart said in Straight to the

Bottom Line An Executive Roadmap to World Class Supply Management

Also cost includes IT costs (infrastructure licenses fees etc) and usability costs In recent years

SaaS and cloud solutions have transformed many functions procurement included because they

often maximize time-to-value vs on-premises solutions

In addition to reducing installation and operating costs most SaaS and cloud solutions rely on the

philosophy of interoperability

bull System-to-system (interfaces and communication protocols)

bull Process-to-process (interdependence and integration) and

bull People-to-people (collaboration)

All of this is in the context of a global economy and global supply chains Concepts like

Enterprise 20 are the new norm

Thanks to SaaS and cloud technologies Procurement can create a workspace containing all the

data required for both strategic and tactical activities This workspace is ERP-agnostic meaning

that it can be connected easily to multiple and various systems (ERPs and beyond PLMs BWs

etc) internal and external systems This

bull centralizes key information in a single location making data collection and analysis easier

bull fosters collaboration with various partners and stakeholders as required by the various

business processes running in the solution

bull streamlines data management by having data directly managed by the relevant data owner

bull simplifies master data management (MDM) by creating one set of master data that then

dispatches the information to the operational systems and

bull increases agility and resilience by securing data and making it easily transferable (imagine an

organizational change that results in changes in responsibilities and the resulting nightmare

of transferring the data contained in mailboxes)

Dont jump whole hog into technology Walk and then run if it works Establish

meaningful metrics to measure its performance Make sure each piece fits into a

long-term puzzle

Robert A Rudkzi Douglas A Smock Michael Katzorke and Shelley Stewart Jr

raquo raquo

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

14

On top of that and as highlighted by the concept of interoperability cloud solutions usually live in

an app ecosystem The capacity to connect to third party solutions is integrated into the solutionrsquos

design and architecture For example this allows procurement to enrich internal data coming from

internal systems with third party content to get a bigger picture than what was previously available

or at least get the information faster by having the right information pushed to the right place and

at the right moment

Sustainable Procurement

As noted earlier this obviously comes from having a culture of continuous improvement (DMAIC)

However this isnrsquot everything Decisions your procurement organization make today will impact

operations tomorrow Therefore looking at the impacts (or future consequences) of todayrsquos

decisions is a critical component of the Procurement Value Engine

This is the capability to influence the future by

bull Defining it (ldquoIFrdquo) - predictive analytics and

bull Preparing for it (ldquoTHEN THATrdquo) - risk management

All of this is about anticipating and avoiding negative situations andor maximizing the occurrence

of positive ones This is the whole purpose of the broader discipline of risk management

Other Stakholder

Procurement

Master-data 1

Masterdata 2

Masterdata n

Suppliers

3rd Party Sources Internal Information Systems

Access Control amp Roles

Business Process 1

Business Process 2

Business Process n

Increasing the Value-for-Money (VfM) of Procurement

We need more standardized readily available third-party information shared amongst networked communities where people can pool data for operational assessment

raquoraquo

Gerard Chick amp Robert Handfield

Boost Your Procurement Value Engine I wwwjaggaercom

16

As illustrated in the quote on the previous page current technologies are characterized by being

able to gather more data thereby enabling deeper and more meaningful analysis However data

alone means nothing It is what you do with it that creates value

A typical example in procurement can be found in sourcing decisions Awarding business to

suppliers must take into account the risks that the decision represents For example low-cost

country (LCC) sourcing has been high on the agenda of many procurement organizations for a

while Most have now learned their global sourcing lessons and are now looking beyond LCC as

simply a ldquocost downrdquo opportunity but also a ldquorisk uprdquo challenge

Increasing the Value-for-Money (VfM) of Procurement

How much do supply chain disruptions cost

Extract from a white paper by Zurich Insurance Group

Extensive research looked at thousands of company results whereby comments in

SEC reports were tied back to the stock performance of these companies The study

shows an average 25 percent reduction in share price and an impact which com-

monly lasts over two years as a result of supply chain disruptions Companies can

be simultaneously impacted by decreased sales and brand damage while incurring

significant extra expenses during recovery times following a business interruption

Historically supply chain disruptions can lead to an average of 9 percent lower sales

and 11 percent higher costs and many companies with extended interruptions never

recover

Pe

rfo

rman

ce

Preparation

TimeDisruptive event

Time of impact

Recovery

First response 9-30

Shareholder impact

Initital impact

Preparation for recovery

long term impact

We need more standardized readily available third-party information shared amongst networked communities where people can pool data for operational assessment

raquoraquo

Gerard Chick amp Robert Handfield

Boost Your Procurement Value Engine I wwwjaggaercom

16

As illustrated in the quote on the previous page current technologies are characterized by being

able to gather more data thereby enabling deeper and more meaningful analysis However data

alone means nothing It is what you do with it that creates value

A typical example in procurement can be found in sourcing decisions Awarding business to

suppliers must take into account the risks that the decision represents For example low-cost

country (LCC) sourcing has been high on the agenda of many procurement organizations for a

while Most have now learned their global sourcing lessons and are now looking beyond LCC as

simply a ldquocost downrdquo opportunity but also a ldquorisk uprdquo challenge

Increasing the Value-for-Money (VfM) of Procurement

How much do supply chain disruptions cost

Extract from a white paper by Zurich Insurance Group

Extensive research looked at thousands of company results whereby comments in

SEC reports were tied back to the stock performance of these companies The study

shows an average 25 percent reduction in share price and an impact which com-

monly lasts over two years as a result of supply chain disruptions Companies can

be simultaneously impacted by decreased sales and brand damage while incurring

significant extra expenses during recovery times following a business interruption

Historically supply chain disruptions can lead to an average of 9 percent lower sales

and 11 percent higher costs and many companies with extended interruptions never

recover

Pe

rfo

rman

ce

Preparation

TimeDisruptive event

Time of impact

Recovery

First response 9-30

Shareholder impact

Initital impact

Preparation for recovery

long term impact

Boost Your Procurement Value Engine I wwwjaggaercom

16

As illustrated in the quote on the previous page current technologies are characterized by being

able to gather more data thereby enabling deeper and more meaningful analysis However data

alone means nothing It is what you do with it that creates value

A typical example in procurement can be found in sourcing decisions Awarding business to

suppliers must take into account the risks that the decision represents For example low-cost

country (LCC) sourcing has been high on the agenda of many procurement organizations for a

while Most have now learned their global sourcing lessons and are now looking beyond LCC as

simply a ldquocost downrdquo opportunity but also a ldquorisk uprdquo challenge

Increasing the Value-for-Money (VfM) of Procurement

How much do supply chain disruptions cost

Extract from a white paper by Zurich Insurance Group

Extensive research looked at thousands of company results whereby comments in

SEC reports were tied back to the stock performance of these companies The study

shows an average 25 percent reduction in share price and an impact which com-

monly lasts over two years as a result of supply chain disruptions Companies can

be simultaneously impacted by decreased sales and brand damage while incurring

significant extra expenses during recovery times following a business interruption

Historically supply chain disruptions can lead to an average of 9 percent lower sales

and 11 percent higher costs and many companies with extended interruptions never

recover

Pe

rfo

rman

ce

Preparation

TimeDisruptive event

Time of impact

Recovery

First response 9-30

Shareholder impact

Initital impact

Preparation for recovery

long term impact

Boost Your Procurement Value Engine I wwwjaggaercom

17Increasing the Value-for-Money (VfM) of Procurement

Because supply chains are more and more global (ie complex) and regulations are constantly

evolving the dimensions impacting sourcing decisions are becoming more and more complex

Complexity includes process dependencies due to the DMAIC approach

and value analysis

Therefore having the big picture when analyzing bids and deciding an award is critical As

explained earlier this is where SaaS solutions and their app ecosystem can make life easier and

represent tremendous value in terms of time saved (data collection analysis) and value creation

avoiding future issues is cost-avoidance that has value even if not measured in a PampL impact

The concept of ldquothe right information at the right time and the right placerdquo is illustrated below in

the example of analyzing bids from suppliers In addition to the quotes a purchaser has all

TCO TVO information via various scores (bonus penalty) based on the key dimensions of

the category

Category

Strategy

Company

Strategy

Strategy

per

Supplier

Risk amp Sus-

tainability

Analysis

Supplier

Integration

Supplier

Controlling

Supplier De-

velopment

Parameters

for Sourcing amp

Award Decisions

From the TCO analysishellip hellip to the TVO analysis (Total Value of Ownership)

Supplier Selection

Supplier Selection

Supplier Connection

Supplier Controlling

Market Research

Category Strategy

eSourcing eSourcing

WebEDIEDI

Supplier Perf Rating

Supplier Profile

+ Supplierlsquos Production Costs

+ Supplierrsquos Production Costs

+ Evaluation of Results

+ Price Constraints + Price Constraints

+ Lead Buyer Strategy

+ Supplierlsquos Material Costs

+ Supplierrsquos Material Costs

+ Process Costs given by the Supplier

+ Overhead + Overhead

+ Potential Evaluation

= TCO = TVO

Boost Your Procurement Value Engine I wwwjaggaercom

18

Procurementrsquos role sitting between the enterprise and

supply markets means it will always be exposed to various factors outside the enterprise probably more so than any other function If itrsquos not commodity prices fluctuating crazily or natural disasters threatening supply continuity it will be something else like unethical practices in the supply pipeline giving the enterprise bad press

The Procurement leader must steer the team through the

choppy waters of such challenges

raquoraquo

Sigi Osagie

Boost Your Procurement Value Engine I wwwjaggaercom

19

Moreover technology does not just limit itself to the passive role of making information available

Technology can be proactive

The terms Big Data and Internet of Things are frequently used as buzzwords but they also

illustrate the increased capabilities that new technologies enable in collecting and presenting

data As always the real value is not in the data itself but in the actionable intelligence that you

build and the actions decisions you take

Therefore algorithms will make the key difference and give companies a competitive advantage

For procurement this means technologies with capabilities

bull to allow an organization to act (or at least to propose a possible set of actions) based on

data analyzed in real time and

bull to create new knowledge by identifying trends or correlations that have not been seen until now

These factors will provide the sustainable value that Procurement is looking for

Our next paper will dive deeper into what these technologies are what they do and the many

ways they enable efficiency and effectiveness but for now we will conclude that for a procurement

organization to have a sustainable Value Engine function procurement will have to build and

develop the right capabilities (people process and technology)

Supplier quote

TCOTVO (internal) based on various di-

mensions (risk CSRhellip)

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

19

Moreover technology does not just limit itself to the passive role of making information available

Technology can be proactive

The terms Big Data and Internet of Things are frequently used as buzzwords but they also

illustrate the increased capabilities that new technologies enable in collecting and presenting

data As always the real value is not in the data itself but in the actionable intelligence that you

build and the actions decisions you take

Therefore algorithms will make the key difference and give companies a competitive advantage

For procurement this means technologies with capabilities

bull to allow an organization to act (or at least to propose a possible set of actions) based on

data analyzed in real time and

bull to create new knowledge by identifying trends or correlations that have not been seen until now

These factors will provide the sustainable value that Procurement is looking for

Our next paper will dive deeper into what these technologies are what they do and the many

ways they enable efficiency and effectiveness but for now we will conclude that for a procurement

organization to have a sustainable Value Engine function procurement will have to build and

develop the right capabilities (people process and technology)

Supplier quote

TCOTVO (internal) based on various di-

mensions (risk CSRhellip)

Increasing the Value-for-Money (VfM) of Procurement

Boost Your Procurement Value Engine I wwwjaggaercom

20

copy Copyright JAGGAER

Editor Bertrand Maltaverne

Senior Project Manager

JAGGAER

Michael Lamoureux

Sourcing Innovation

More information

wwwjaggaercom

JOIN THE CONVERSATIONon our blog at wwwjaggaercomblog

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+19196592600

USA

+43180490 80

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