By G. Benichou - Chief Operating Officer
The new age of procurement
Finding a great innovative idea. Easier said than done. But you are not alone…
As a marketing executive, you focus invariably on the importance of collaboration within your team, partnership with your suppliers and vendors with a view to develop a strong relationship with your customers. But would you consider, in your procurement role, engaging in a close partnership with a innovative service provider such as 360tovisit to design a tailor made marketing solution for your company? Perhaps by the time you have read this article you will…
Research data from leading global consultancies shows that procurement executives who consider innovation partnership with their vendors a corporate priority are very few and far between. Furthermore, the same data shows that those who do generally do better than those who don’t.
We will attempt in this short article to understand why there is such a disconnect.
From the procurement dichotomy to serendipitous creativity
The 360tovisit team enjoys participating in innovation projects on behalf of companies where there isn’t such a big divide between procurement and innovation. Companies where innovation is a corporate priority, the fruit of a deep collaborative relationship with suppliers and not the by-product of procurement disintermediation.
Indeed it can be quite frustrating for highly creative suppliers to have to conceal new ideas because they realize that days or weeks of work spent to present their brainchild to their client will not be compensated. What a shame and, more to the point a loss of valuable innovative potential.
Conversely, procurement’s role should really be of facilitating, setting forth a fertile environment that would yield a productive innovation ecosystem. Anything else would just be counter-productive. Period.
Of course the debate on which is more successful in a company, procurement or innovation, has been rife for a significant amount of time. It is a simplistic way of apprehending this issue, and as such it can be a source of internal rivalry and dysfunction. In simple terms, in order any risk of shoulder rubbing, corporate governance should be strong enough that procurement departments should be rewarded for looking after innovation and coming up with great products, and innovation departments should be rewarded for keeping cost under control by proposing profitable new ventures, thus reducing the need for outsourcing. But the door should be left open for serendipitous creativity. At all times. You never know when success will come through that door…
05 JUNE 2014
Perhaps this is rendered more difficult in the current environment where people seem to be rewarded more because they reduce cost than spend for procuring growth solutions.
Sometimes, a little capital set aside for emergent supplier-driven proposals can go a long way!
It’s all about cost vs value
Just how constructive would a particular procurement operation be if the endgame significantly reduces the potential for innovative growth opportunities?
360tovisit products are proprietary and therefore tailor able to each of 360’s clients, or partners. This, of course, at a little extra cost. But if the cost increase is offset by a tenfold value increase, would it not be a better strategy to go for something that would be adaptable in the future? A famous Frenchman once said: “I cannot afford to buy cheap stuff”. He was candidly talking about value. In the same way as an acquisitive organisation would consider Total Cost of Procurement over Total Cost of Ownership. It is all about where, in innovative growth potential terms, the transaction will position your business.
The 360tovisit team helps businesses realign their expectations around the most effective relationships between innovation and price. Because innovation is added value. 360’s executives are only acutely aware that innovating when you have other things to take care of can seem a daunting task. If you can understand the true meaning of value over cost, you will understand the revenue growth potential that a powerful leveraging tool such as 360’s fully responsive web solutions can represent.
You are no longer alone.
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