Whitepaper - The Future of Enterprise Vendor Management (EVM)
Abolishing siloes, sharing data and a holistic procurement strategy could take your vendor management from good to great, saving money and creating value. All you need is a new mindset – and some new technology...
How does your company go from good to great – and stay there? Management theorist Jim Collins, who spent years exploring that question, identified seven common characteristics of outstanding businesses. One of those traits, particularly relevant to the task of vendor management, is using technology to accelerate growth. Collins did not mean that businesses could leapfrog rivals with a magical technological fix. To accelerate growth, he argued, technology must be used strategically in the service of core values, in the most important functions, and to maximise the business’s strengths. In other words, technology might speed up a bad business but it would not necessarily make it any more efficient.
The need to accelerate growth is now more urgent than ever. The old-growth model – loosely based on the premise that a rising tide lifts all boats – is gone. In such circumstances, unlocking growth from within the organisation is essential and, fortunately, eminently doable. Companies that rethink and reinvent the way they manage procurement, vendors, and supply chains have a significant opportunity to improve their bottom line.
Consultants McKinsey estimate that poor management of supplier performance is adding 10-20% to total costs in the contracted category. Most companies recognise they can do better: one study from the Massachusetts Institute of Technology found that 77% identified two of their three greatest procurement risks as ‘dependency on suppliers’ and ‘supplier quality problems.’ Historically, procurement has been regarded as a function that does, rather than thinks, yet any CPO who can argue credibly that they can add a percentage point or two to operating profit will grab other stakeholders’ attention.
We can and will extend best practice because this is demonstrably the right thing to do for the bank in the long term. It is helping us to deliver more value for our customers – and deliver that value in less time