- 16
- JUL
- 2009
Knowledge is Power - Procurement Intelligence
Author: Mark Perera - Categories: Procurement Intelligence
As anyone in today's global business world will tell you knowledge is power - and no- one knows this better than the modern-day CPO. So why, in the majority of cases, isn't procurement taking advantage of the wealth of information available to it?
Fluctuating commodity prices, security of supply and increasingly global supply chains, dictate that the world of procurement is now far removed from the simple buying role that many in the upper echelons of businesses viewed it as at the turn of the century.
When it comes to procurement intelligence, however, it appears that most companies are still very much in catch-up mode.
Earlier this week the Procurement Intelligence Unit caught up with Neil Deverill, former CPO and current chairman of the Procurement Leaders Network Advisory Board, who outlined just where procurement lies in an area that's likely to emerge as a key battleground over the next decade.
And according to Deverill there's an awful lot of work still to do.
"If you take the FTSE 100 companies, which is a good starting place, probably, at most, a third of those companies would have really organised market and supplier intelligence gathering and dissemination structures in place," says Deverill.
"If it was any more than a third then I would be absolutely amazed - and remember these are the top 100 companies in the country. It's a coming practice, it is on the increase, but it is hardly there at all in an organised way in procurement today."
While a number of leading companies are clealy lagging behind, the current market conditions - which, few would argue, have seen procurement's profile rise dramatically in the past 18 months - are serving to shift the need for in-depth supplier (not to mention competitor) information up priority lists in boardrooms across the globe.
"As procurement is becoming more intelligent itself (and has begun to attract better calibre people) then there is a gradual realisation that we don't have enough intelligence either about what we want to buy, who we want to buy it from, how the markets are changing or even what our competitors are doing," says Deverill.
"In the beginning procurement didn't realise that itself, which obviously meant that the company didn't realise it either. As procurement's maturity has improved though, it now knows it needs much more intelligence than had previously been the case."
And it's this process that's cementing procurement's place at the heart of the modern-day business.
"As procurement starts gathering information about suppliers, about products, about competitors and about markets, then they then are recognised much more by their colleagues in their organisations," says Deverill.
Proof, if it were needed, that knowledge equals not only power, but also influence.
Comments
Gerardo Aguilar
Wed 9 Sep 2009 10:27
I found the article highly interesting and thought provoking. Many Sourcing organisations nowadays are going through a transformation from service providers (transactional focused) to business partners (demand management focused) which requires more integration with the business. To be informed and up to date regarding the latest market trends, prices changes, competition, etc is indeed your entrance key to the business discussions. G. Aguilar