Indirect Category Sourcing Savings: Fact or Fiction?
Delivering Credible Benefits from Sourcing and Category Management Programmes.
Delivering real benefits from category management and sourcing programmes is a core challenge for senior procurement leadership. Whilst category management has worked well for many organisations, we still see some fundamental issues for procurement, particularly in ensuring tangible benefits are delivered and credibly reported. Too often, the “savings” figures presented by procurement are simply not believed by senior management.
Peter says: “I’ve co-authored it with Ed Cross, Executive Director of Xchanging Procurement Services, also a serious triathlete and rock music fan. (I’d love to say we developed the material during our regular 20-mile training runs… but I’d be lying).
We start by looking at what makes sourcing and category management programmes successful. As well as technical skills, procurement has come to understand that people skills are also vital.
“That is because sourcing and category managers still have to persuade the business – budget holders, senior executives and users of the goods and services – to play their part in the process. Otherwise, how can procurement be sure that requirements and specifications are accurate and appropriate? How can you possibly select suppliers without involving the people who will have to actually work with them, day to day? And if you do not obtain that buy-in, then too often procurement ends up with contracts in place, but very low internal compliance to those deals.”
But we then suggest that there is a third and less often considered critical success factor – what we have called “Programme and Delivery Management”.