Sourcing only identifies value. But value is not realized until it is captured. Capturing value requires each purchase to go through the system and be realized as a perfect order — the right product at the right place at the right time for the right person at the right price using the right delivery method, and so on. In order to make this happen, an organization has to do more than source — it also has to execute, track, report, and correct. Otherwise, it will fail to realize 30% to 40% of negotiated value (which is a statistic that has been well known for almost a decade).

However, the only way an organization can properly source, execute, track, report, and correct procurement operations is through proper program management, which is much more than just executing an event, negotiating a contract, and filing it away in the contract management system. It’s taking that e-paper and making an e-process out of it, preferably in an integrated Source-to-Pay platform that can insure each step of the program is followed.

This requires a program-management based platform, something which the average Procurement organization does not have as most first, and even second, generation sourcing platforms did not have any real program management built in.

And when one thinks about what is involved when one tries to consolidate the messy and muddled functionalities scattered across the ERP, analytics, invoice processing, contract management, supplier management, and other supply management platforms across the organization, supply program management can be a difficult and complicated task. The solution of which is an effective program management strategy, backed up by an appropriate platform-based solution.

To find out how to get started, download the doctor‘s latest white paper on The Importance of Program Management For Savings and Value Realization”, sponsored by SynerTrade. The read will be worth your time.