08 Nov 2011 Australians don’t give a XXXX about procurement
Some great things have come out of Australia but leaving Rolf Harris and Skippy aside, passion for procurement doesn’t seem to be one of them. Why is it that Aussies don’t get as passionate as the poms about procurement?
Well I’m not sure that the Europeans do get quite as passionate as Claudine Swiatek believes in her captivating article in her blog The Young Sourcerer about passion. But her point is well made that it’s a shame that procurement isn’t as well respected in some quarters as it should be.
It is a problem. Supply chain management, procurement, purchasing, P2P, AP – they all get a bad press being viewed by many as back office business that’s merely a necessary evil. But if procurement is to get the respect it deserves, it’s practitioners need to get passionate. They need to evangelise their profession – preach the pros of procurement.
3 reasons to be passionate about procurement
Here are just three reasons to be passionate about SCM, procurement and P2P.
1. Supply chain management
Over the last 50 years, the development of enterprise software that can optimize the sourcing, storage and shipping of goods across the globe has transformed the world. Without it, the western world wouldn’t have fresh food, TVs or mobile phones. Without modern supply chain management, developing countries would not be able to thrive and the developed world would not be able to respond so quickly victims of natural disasters. It’s not all great of course. Modern supply chain management has been one of the dominant single forces in the development of the world as we know it in the 21st century. There are of course those that would point to globalization as one of the most important factors behind environmental change and we do have to get better at this but there are few who would argue that effective, modern, supply chain management is an enormous asset to us in the modern world.
Don’t let sales and marketing get all of the accolades. Sure, top line numbers are important but business isn’t just about new customers but the financial impact of good procurement can make the difference between profit and loss. It’s naive to think that procurement is some back office function or a necessary evil and, unlike sales figures, procurement saving go directly to the bottom line – every last cent!
3. Purchase to Pay
Anyone that thinks of P2P as pedestrian has never stopped to consider what world class purchase to pay is doing today. Powered by P2P, dynamic discounting allows organizations to take discounts from suppliers in return for early payment. Nothing new there you may think – but you need to see it in operation to understand the massive impact it can have. (Take a look at Taulia as an example.) A 2% discount in return for payment in 5 days can deliver a return on investment of more than 30%. Treasury managers can’t dream of getting that kind of return elsewhere.