The Chief Financial Officer has a significant role to part in the development and implementation of a strategic procurement philosophy.
The functions that the procurement function performs – supplier management, sourcing and contract management – are often referred to as strategic procurement. However, by working in partnership with the procurement function, the CFO can better understand and leverage strategic procurement in conjunction with other spend control initiatives, to deliver positive impact on the bottom line.
The CFO role is thus;
1. work hand in hand with the senior procurement people
2. use their sphere of influence to gain organisational support for strategic procurement
3. help with the refinement and implementation of procurement policies to drive savings
4. help guide the application of enabling technology
As 2011 is fast approaching, thoughts are probably turning to how you are going to achieve your numbers in the year ahead. There is undoubtedly uncertainty in the markets at the moment and the economists seem to be divided as to what the year ahead will look like.
However, your success in 2011 will be more determined by your actions than any external factors. If you look back over previous recessions/ downturns, there are always those organisations that come out of them stronger and more profitable. Equally, there are individuals that thrive when the going get tough and those that just give in!
So, the question is – “which are you going to be in 2011?”
To start as you mean to go on, this time of the year is always good to reflect and trim any fat that exists within your business. Take a look at the following five suggestions and see how these can apply to your organisation. Please feel free to add other ideas within the comments.
1. What activities are you undertaking that is adding no value to your end customer? Once you have identified these, review how you could undertake them differently, more efficiently, or more radically, determine whether you have to do them at all or can you outsource them to a third party who can provide greater leverage?
2. What is your core competence and what non core activities are you doing that can be outsourced? Again, by creating focus on your business function or ideally across the organisation, identify those activities that you must do to support your core competence. At the same time, this will help you identify those activities that are non core. Look creatively at how you can more effectively deliver these non-core activities.
3. Ask yourself the theoretical question – “if I had to deliver the same results with 80% of the resources that I presently have, how would I do it?” – putting this question another way, all organisations have people within the organisation that deliver little or no value. Make it your business to strip the lowest 20% from your organisation each and every year. You’ll be amazed at the impact that this simple challenge creates.
4. In any process, there will be many hand-offs between people within your organisation. Take each in turn and challenge yourself to reduce these hand-offs by 50% – by empowering individuals within your organisation to take action at the front end, you’ll radically reduce the workflow across any process and the efficiency gains will be significant
5. How is your sales and marketing function performing? Research indicates that it now takes a minimum of seven contacts before a prospect raises his/her hands to enquire about your product/ service. What does this mean to you? Well, assuming that you have your targeting correct, how many times are your marketing people or sales representatives giving up after just four or five contact points? By implementing a structured approach to lead generation taking into account the requirement for 7 contacts, you’ll quickly drive new business generation.
Take the opportunity between Christmas and New Year to reflect on how you can apply these five simple steps to ensuring that 2011 delivers your ‘best year yet!’
Press Release – 20th October
Procurement specialist xynergie has called for Government savings announced in the Spending Review [Oct 20th 2010] to be achieved through improving procurement efficiencies, rather than by cutting frontline services.
xynergie chief executive Tony Lockwood said: “Government procurement inefficiencies were highlighted in Philip Green’s Efficiency Review. While the chancellor has said it will make savings by improving efficiency as well as making cuts, we are yet to see how they will achieve this. Technologies and methodologies are available and in-use in the private sector that completely rule out the levels of inefficiency shown in the Philip Green report.
“In the way it handles procurement, the Government needs to get up to speed with the private sector. It must re-engineer its procurement processes and make savings with backroom efficiency, not frontline cuts.”
For further information, go to www.xynergie.co.uk
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This is a very interesting Video
It really does support what we have been saying for a long time – there is a real need for Government – Central and Local to come together and collaborate across back office functions. This will drive out massive efficiencies without the negative impact on front office services.
xynergie have the skills, experience and will to deliver massive value, improved performance, reductions in costs and efficiency gains across both public and private sectors.
The new coalition government has rather erratically announced a £7.5bn cut in the budgets for BSF and there is yet another outrage from local communities that have been affected.
Although, I never hear of any realistic alternatives from the moaners, having read a range of articles on the subject over the last week or so, I believe that there is a real option that so far just doesn’t seem to have been considered.
Looking at some of the designs that have been submitted for various projects throughout the country, it is evident that the architects are using the opportunity to make their mark in the local community and on the face of it, I don’t have any real issues.
However, it must be remembered that first and foremost, a school needs to be functional and it is apparent that some of the newly built schools just aren’t and that’s where the designers have got it wrong. Design over function never works!
So, what’s the alternative, an alternative that will reduce costs and just maybe facilitate the building of more schools?
I’m working on the premise that a school is a school and given schools of similar size, the obvious question is why do we need to have different designs. Lets concentrate upon designing the ‘ideal’ functional school and lets make sure that all future builds utilise at least 90% of this standard design. The remaining 10% will concentrate upon the look and feel and will facilitate some individualisation and styling.
The approach that I’m proposing is in practice in the motor industry – the Audi A4 has exactly the same underpinings as the VW Passat, as well as a Skoda and a Seat model. Although you can see the familiarity of the four cars when they are together, they still retain their individual styles.
Why can’t this be applied on designing schools?
That’s the question that we should be asking and forcing the government to consider.