Reducing costs + training teams = increasing profits

Grahame Ball is managing director of bluewire limitedI recently left a corporate CPO role to set up my own procurement consultancy. Why? In my many years’ experience working with other CPOs of large corporations and with SMEs through my chairmanship of CIPS Thames Valley branch, it seemed to me that most businesses simply do not get it when it comes to sustainable procurement savings and the use of consultants.

By sustainable, I do not mean ‘green’ but long-lasting impact. Not here today and gone tomorrow. Not mortgaging the future. Not jam today.

The consultant appeal is always the prospect of significant savings appearing on the P&L, which will more than negate the day rates and gain share payments their services demand.

Where I am particularly struck is that if the procurement team is not considered capable of managing and reducing costs effectively or quickly enough, hence the need for consultants, then how will they be able to manage costs effectively when the consultants have finished their work?

Does anyone stop to think why the existing team is not delivering what is required or how the perceptions of the team will change after the consultants have left?

The obvious for me is that you cannot do one without the other. In other words without upskilling the procurement team in tandem with external support on cost reduction initiatives, the whole exercise is doomed to fail, not while the consultants are in situ but after they have gone.

I am not against consultants having now joined the gang, but I do find it peculiar that procurement savings and procurement training are not seen as mutually dependant.

In my opinion the procurement team should be taken on the journey as one of shared ownership and trained as part of the consulting process, fully engaged and in the loop, consulted and advised, coached and mentored. This training should highlight the use of well-regarded procurement theory but perhaps, more importantly, show the tools and techniques being used in real life situations. The consultant’s legacy has to be an upskilled procurement team because this is the legacy that will really benefit the business for the long term.

For me, at the risk of stating the obvious: reducing costs + training teams = increasing profits.

☛  Grahame Ball is managing director of bluewire limited

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