I hope that you have enjoyed the PurchTips article “Savings Estimates: Your Reputation At Risk.”

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With the title of that article and the title of this blog post, you may be thinking that any discrepancy between your cost savings estimates and actual cost savings will be the kiss of death in your purchasing career. Maybe that is a little bit of an exaggeration. But, still, you can’t be sloppy when presenting your savings estimates.

I’ve seen purchasing departments where the only savings reported was the savings estimated on the day that a contract was signed. In these departments, there was no follow up to confirm that the estimated amount of savings – or any savings, for that matter – has been achieved. Not coincidentally, these purchasing departments also happen to not get very much respect from the C-suite.

There is usually some variation between savings estimates and actual savings. Whether that be because a different quantity of goods or services was purchased, maverick buying occurred, or some other reason, it is important to track actual savings and know why there was variation. Having this intelligence can help you capture more and more savings with the more sourcing initiatives you conduct. It is key to continuous improvement.

Plus, you just may impress finance types who respect your attention to detail and understanding of the numbers. And that can’t hurt in terms of job security.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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