Question 3: What are the must do’s and top 3 best practices to follow when it comes to cost optimization, risk mitigation and speed?
Many procurement professionals continue to focus on cost savings and cost reduction as their primary objectives, and at a time when digital business calls for agility and flexibility, traditional procurement practices can prove inhibitive. So, to accelerate digital transformation, procurement professionals must now represent the critical link between their organization’s internal capabilities and the external digital business ecosystem.
I’d summarize the top 3 best practices as follows:
- Create differentiated procurement processes that can support speed and agility when it makes sense.
- Develop your analytical capabilities to be able to play the role of the internal advisor to your stakeholders.
- Develop your performance scorecard and make sure that you measure your value on key performance indicators (KPIs) beyond savings. Cost optimization does not only come from pushing vendor pricing.
Most important, I’d encourage all procurement professionals to be strategic — in their practices, their processes and their thinking!