From Ideas To Savings – Chapter 3 – Part 3

26 December 2016

From Ideas To Savings – Chapter 3 – Part 3

Your event is now finished, and if all goes well you’ve managed to build a good deal with your suppliers.

Together Alun Rafique, Co-Founder of Market Dojo and Pierre Laprée, Founder of Per Angusta have combined their expertise to ponder the process of turning procurement ideas into real savings.

Per Angusta and Market Dojo

This is the third chapter of a series #From Ideas to Saving, you can catch up ons #From Ideas to Saving, you can catch up on Chapter 1 here, Chapter 2 here, Chapter 3, part 1 here, and Chapter 3, part 2 here.

Chapter 3, part 3 – Cleaning up

Chapter 3. From Projects to Savings – Part 3 – Cleaning Up

In one way or another (cost reduction, re-engineering of your needs or simply a solution to your previous problem) you’ve managed to improve the deal for your company.

Results savings

It is time to let the world know! Or at least your boss, your stakeholder and your CFO!

One very common issue in Procurement is understanding and clarifying savings figures. It is a very important issue (which we’ll cover in future blogs) but the gist is: you have to agree on upfront with the organisation what is a savings (how do you calculate a baseline value, does it have an impact on the bottom line etc).

Once the rulebook is written, you can start reporting on your savings, when your projects end. But this is not the end. And I have strong opinions on this one.

If the buyer has not sat down with the stakeholder to explain to him how we calculate savings, what this means in this project and obtained his “OK” on the numbers, then THE SAVINGS DON’T EXIST.

And of course, there is one final step: the potentially agonising and traumatic experience of getting a sign off from Finance.

Savings validated by Finance

It may be tedious, but it’s probably the single most important way to build credibility. If you get people to agree on your numbers, you can do anything after that.

Of course, in order to get to that point, you will need to talk to them (and listen), to agree (yes, I did say agree)… and to demonstrate that you can add value.

Another important point is that whatever savings methodology you settle for, it will most likely work in 80% of the situations. What matters here, is that you have built an upfront understanding of finance. If you have, then you will be able to have those adult-to-adult conversations about handling the difficult 20%.

Ultimately, this “savings reporting” part is often scrutinised, but this is the importance of basing it on figures.

And again, the need for the right tools to give visibility, to ensure that your numbers are right… and creating an efficient way you can spend time with people (and not with a spreadsheet program).