Moving Procurement Beyond Savings to Value
How Do we Measure Value in a Post-AI World?
This week’s post takes a slight detour from our discussion on HOW to future-proof the Procurement practitioner to WHAT the practitioner should be measured on.
Specifically, I’m sharing a discussion I had earlier this year with Rich Ham of Fine Tune and Philip Ideson of Art of Procurement on the need to rethink the Procurement scorecard, including that most traditional of metrics: savings.
In our chat, we get into:
The problem of short-termism in Procurement’s incentive systems and how we keep making long-term sacrifices for short-term wins
What a healthier incentive system could look like - including a scorecard that includes a multi-faceted set of metrics that truly capture long term value
How this scorecard needs to encompass in-year performance expectations, multi-year outcomes that reflect longer term aspirations, as well as discretionary goals that, while somewhat subjective in nature, capture the contributions that matter
The need for the CFO and CEO to buy into procurement’s expanded definition of value - but also the need for Procurement to advocate for itself and a “new normal” when it comes to metrics
You can check out our discussion in full via the video link below.