Procurement has an image problem.
We’re often seen as the department our stakeholders and business partners run to when they have a problem that requires an immediate reaction. We’re often brought in to extinguish the fire extinguisher, but rarely to prevent them from happening.
So, how do we move from being a reactionary department seemingly in servitude to our stakeholders, to a better respected business partner that is seen as a value generator.
Part of the solution is making our contribution to the organisation better known and more visible. We’re not just a department that fulfils our annual cost savings targets. We also provide a whole lot of other value that often goes unmeasured, but where individual business partners are more directly impacted.
It’s here where we discuss how better awareness and communication of these initiatives, and a common mechanism to measure and track these, can make a huge difference to how procurement is perceived internally as a credible business partner.
My guest this week on the show is Pierre Laprée, CEO of Per Angusta. They’re a French company who have developed and successfully implemented a tool that tracks total procurement performance in major businesses.
Measuring Procurement’s True Value to the Business – Pierre Laprée from Per Angusta
3:12
Pierre explains his background and how he went from Procurement Director to SaaS startup entrepreneur, by way of seeing a clear problem that needed solving and having the foresight and confidence to jump in with both feet to develop a solution!
6:17
I ask Pierre’s thoughts on why procurement is often misunderstood. Whether he sees it as a lack of corporate understanding of what procurement actually does, or whether culturally it’s just that we’re still seen as being an administrative function.
7:43
Technology is not the solution to all problems. If the organisational structure is immature and a CFO is too blinkered to acknowledge procurement performance beyond just hard savings, there’s no magic bullet.
8:42
We discuss the dangers of only measuring cost savings, and what can be done about this in terms of wider value recognition.
Pierre explains how performance tracking can be expanded to other financial and value-driven contributions that are not as obviously visible in the P&L.
There is a value bomb dropped here, around how small steps with value generation and achieving “more with less” can build trust on a longer term basis with key stakeholders.
We discuss mechanisms of how cost avoidance can be measured and recognised, and how designating and agreeing a model for this requires interdepartmental alignment right from the outset.
Is data quality imperative to get results and buy-in from using the tool? We talk about the issue of potential lack of consistency and reporting standards across different countries and business units.
Rounding off the interview, the benefits of open platforms and interconnectivity. There is much more flexibility when it comes to using best-of-breed solutions vs. a one-size-fits-all enterprise level procuretech software.
How to connect with Pierre:
How to connect with James:
