Should procurement be moving to gain more recognition for non-cost related value drivers?
Have a look at Hackett Group Amy Fong's report and tell me what you think. Have you done this? What metrics do you use in your procurement scorecard? Did it work or were there problems you didn't anticipate?https://www.thehackettgroup.com/procurement-strategic-value-recognition-insight/
Great paper Amy and I think brings to life the value concept and education within the business. My experience is that the best procurement organisations have metrics aligned to the key business drivers and in particular growth aspirations balanced with "business as usual" metrics which remain important.
Community Benefits (in the public sector) will form part of this, but there’s plenty scope within contracts to do this.
The question is whether procurement can and will sell these benefits and successes across the business and bring the wider stakeholder group into having a more tangible involvement.
The biggest challenge I have seen with this Helen (Higher Education for example) is measuring the value ensuring it is quantifiable with a credible measure. For example procurement in Higher Education is looking to measure value added by procurement that has enhanced the student experience. For example looking at considering WELL Building Movement Standards in Construction which focuses health and well being in the design phase. Certainly will keep you posted.
Thanks Helen! I'm interested to hear what others have to say on this. We built our Value Pyramid over a decade ago, and according to our data we all still want to climb up that pyramid but our scorecards aren't changing. However, anecdotally I know a number of companies delivering powerful results in areas of supplier innovation, risk mitigation, working capital, and CSR. This is challenging work but its also the fun part!