As a Procurement professional you’re hyper-aware of costs and the need to get ROI. But, are you maximising your own ROI? Procurement roles are as prone as anyone to spending their time inefficiently. And, time is the big cost that many forget when allocating it.
A sourcing manager typically carries a heavy load of RFPs at any point in time, each project governed by its own set of stakeholders and timeline. The requirements rarely stay the same, as RFX(s) reveal more information. This leads to several rounds of information gathering and negotiation before all parties are ready to “pen” an agreement.
Successful procurement teams are well aware of this, so have mastered a number of time-saving techniques that go beyond simple time management. (By the way, we recommend “7 Habits” by Steven Covey as essential reading for every busy Procurement role).
What tricks do they have up their sleeve? Here are some tips, targeting three roles within a Procurement organisation.
The single most effective time-saving technique for sourcing managers is to ask the question: “How much time should we spend on this project?”
The “principle of optimum sloppiness” states that you should only put in the amount of effort it takes to solve the problem and no more. That same rationale applied to buying a car would dictate that finding a car that meets your requirements, at a good price, on your first visit to a garage should end your search there. That’s not what usually happens, as we know. Typically, there would be a further two or three months of searching before settling on a car that ticks every box – and, that car might well the first one you found!
Sourcing managers are naturally curious and prone to going deep into a project because something piques their interest. Project kick-off is a great time to align on how much team time you are willing to spend on the project.
Often, clients think they need to cast the widest possible net to identify suitable providers. And, if the team fails to agree on a time limit, this can absorb a ton of time. Our advice is to quickly circle in on two or three vendors that everyone agrees look good, and thoroughly assess only those with the goal of making a decision in the agreed timeframe.
A primary function of a sourcing leader is as coach to the sourcing managers, driving high-level alignment and ensuring they’re managing the projects in their pipeline with efficiency.
A popular tool for sourcing leaders to help sourcing managers save time is ABC classification of projects. Maybe you have come across this methodology under another name like: Strategic Sourcing Event, Tactical Event or Just-do-it. The central idea remains the same, which is to segment projects and establish guidelines on how much effort each category will require.
High performing sourcing leaders regularly use segmentation data in their pipeline meetings to reallocate and direct resources to high ROI activities.
To give an example, the result of a recalibration like this in a pipeline meeting could be the ability to outsource the sourcing activities related to tail-spend, freeing up an experienced sourcing managers’ time for higher impact activities.
Fast moving businesses might selectively renew vendor contracts providing a consistently competitive and satisfying service, in order to focus their time on more critical activities. Singling out these renewals for a different, much shorter process, can win back valuable hours.
Finance Operations Leader
There’s plenty of opportunity to save time within this role, not just for the Procurement organisation but also for the many users of procurement services.
Easy wins include eSignature, or paperless, invoice processing, as well as vendor portal. Simple tools to help you digitise are readily available today, and easy to introduce into your business. If any of your transactional activities are being done on paper, you have an immediate opportunity to transform that area.
In a survey of 35 of our customers, using DocuSign eSignature in their Procurement processes, each one was able to reduce turnaround time by 85% or more. Automated invoice processing and vendor portal is proven to save time for the Procurement team, business owners, and suppliers alike.
To conclude, here’s 3 steps to saving time in Procurement:
Define how much time you’re prepared to spend on each project up front
ABC classify your projects to decide how much effort to apply to each
Replace printing, scanning, signing and emailing agreements with eSignature
What are your top time-saving tips for Procurement roles? Let us know!
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