Blue Print Development Overview
A Clearly Defined Roadmap to (e)Procurement Success
Our unique research methodologies combined with our extensive real-world expertise has enabled us to accurately identify trends well in advance of our contemporaries. Based on this different (some have suggested insightful) perspective of what drives a successful supply chain we have developed programs where the results have consistently exceeded client expectations. One of the key elements of our approach has been directly linked to our ability to build a relevant and clearly defined roadmap that takes into account diverse and even disparate variables.
This roadmap represents the foundation of the Blue Print, which when introduced will empower your team to achieve your organizational objectives unecumbered by technological considerations or limitations. Resource Tip - Technology's Limitations (pgs 18, 19)
What are the Main Elements of an Effective Blue Print?
No matter how complex the environment, there are three key elements:
- An alignment of understanding whereby we confirm that we have properly assessed the present procurement environment including the preparation of the Results Objective chart
- An alignment of capabilities (i.e. programs, existing and proposed technologies) with the identified real-world processes and corresponding Results Objectives
- Establishment of the framework and guiding principles for a strategic proof of concept Pilot Program including participant identification, timelines and clearly defined goals (results)
Resource Tip - Communication & Results (pgs 15,16)
Why is this process different from traditional approaches?
Recognizing the high rate of e-procurement initiative failures associated with traditional or what has been considered mainstream approaches, we believe that the above process is the first step in providing the most effective methodology for:
- Establishing concise and acievable objectives
- Confirming that the necessary capabilities and resources are present to actually achieve said objectives
- Generating tangible results through a Pilot Program centered on a specific commodity group to both validate the findings (i.e. savings) and determine the requirements for wider application. (Note: a Pilot Program also provides an opportunity to test various technologies prior to making a long-term commitment of dollars and resources. Many vendors now offer trial licenses at a substantially reduced fee such as SAP who recently introduced a 90-Day E-Sourcing trial program for $10K)
Questions and Answers
Q - Why does Procurement Insights link ROI performance to sustainable savings?
A - An example of why we emphasize the importance of sustainable initiative savings to ROI performance is a CAPS 2003 study of Reverse Auctions. The study found that organizations that utilized a Reverse Auction tool reported that Cost of Good savings diminished with each event so that by the 3rd or 4th auction there were no longer any appreciable gains in this area.
What is compelling about this result is not so much the decline in savings (although it is worth noting), but the fact that most organizations used the initial results to calculate the ROI of their technology investment. Just imagine how the licensing and maintenance fee negotiation with the vendor might have gone if this important piece of information were available at the start? This is the reason the market as a whole has become collectively numb to vendor (and consultant) proclamations of significant savings. It is also the reason why we must effectively measure and substantiate sustainable savings before making a technology commitment.
"Generally speaking 1st and even 2nd year savings forecasts should be discounted as a result of market price adjustments and varying degrees of pre-existing inefficiencies at the organizational level."
"For example, with the CAPS 2003 study the savings related to the first event were likely significant due to organizational inefficiencies that had existed for some time. As a result, the introduction of even the most basic purchasing tool would have little difficulty in producing outstanding results. However, after the buying organization's cost had been aligned with the real-world market, the study found that the savings evaporated. In fact with certain commodities the price actually increased."
"It is therefore incumbent upon individual organizations to clearly understand and identify the savings capacity of their specific organization through an evolved spend analysis. More to the point, what is their commodity characteristic breakdown, how does this mix translate into savings potential and what tools are required to drive the results."
Resource Tip - Evolved Analysis & Commodity Characteristics (pgs 1,18,19)
Start Your Blue Print Development
- Contact us indicating that you are interested in learning more about Blue Print Development
- A member of our team will call you to schedule an appointment to review your current environment to determine how our Blue Print Development service can assist you in achieving your organizational objectives. (Total service costs and completion timelines will also be reviewed).