Daily Archives: November 22, 2015

Influential Damnation 95: Competitors

Conferences are annoying, Consortiums are frustrating, but Competitors are outright damning as they are there, in your face, day in and day out. Your company makes an announcement. They try to one up the announcement. Your sales team gets in front of a customer. They weasel their way in. Your engineers get a great idea. They try to steal it. Your scientists make a big breakthrough. Here comes the corporate espionage! And so on.

But that’s just the tip of the iceberg. Procurement has its own set of problems to deal with. These include:

They compete for limited supply and drive prices up.

Markets are all about supply and demand. Sometimes supply is based on demand, as more demand leads to more supply, but sometimes supply is based on raw maw material availability. Raw materials are often in limited supply due to the amount that can be mined, harvested, or processed. And if your competitors need these raw materials as badly as you, and there is not enough to around, either your prices are going up or you’re the organization not getting your demand met.

They compete for limited talent and drive prices up.

Procurement professionals need to be jack-of-all-trades and masters-of-one. These individuals are very few and far between and your competitors will want them just as bad as you. So, not only will you have to vie for their attention, but you will have to offer the salary, training, international experience, socially responsible, and very attractive opportunities the best candidates are looking for, and one way or another, that’s going to cost you top dollar.

They compete for limited expert (technology) resource time.

Let’s face it. You’re never going to be able to find and hire enough talent in-house to tackle all of your Procurement project needs, which will include complex sourcing, strategic procurement, non-complex/non-strategic sourcing, contract (lifecycle) management, supplier (relationship) management, performance analytics, technology implementation, and data feed integration, and you will need third parties to assist you. However, due to ever increasing requirements for supply management success, and the ever increasing sophistication of platforms and processes needed to manage your constantly evolving global supply chains, you will not only need the best vendor partners, but the best talent at those partners, which is a relatively small percentage of the overall workforce. Your competitors will be vying for this talent too, and some will be making bigger (and in the eyes of the vendor) better offers for the time of these expert resources, which could leave you up the creek without a paddle.

While your organization might need competitors to justify its market, when it comes to Procurement, sometimes that’s the last thing the organization needs. That’s why Competitors are another perpetual damnation.