Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. This week, I’ll be reviewing a whitepaper entitled “Reaching Sourcing Excellence, Part 3: Sourcing Skills Go Straight to the Bottom Line” from AMR Research and Ariba.
The point of this whitepaper can be summarized quite easily: the higher the skills of the sourcing team, the more profit they will generate for an organization. The whitepaper presents some interesting research findings that support this premise.
For example, the whitepaper says that “68% of companies can achieve an 85% or higher adoption rate with their sourcing technology if they offer sourcing training and a certification program during the implementation process, according to our studies. The problem is that many companies stop at technology training only, assuming their employees have the knowledge to handle the rest of the sourcing process.” This echoes a sentiment I’ve made here before: dumb purchasing managers are those who think that training is done once the employees know how to use the system.
In addition to such statistics, the whitepaper outlines a six-step process – not unlike the seven-step process we teach in the whitepaper “The Purchasing Leader’s Guide To A More Successful Team” – that the companies that achieved higher sourcing value used in order to achieve such value. Those six steps are:
1. Force-ranking employees based on skills
2. Providing complete sourcing business process training for all employees
3. Establishing continuous sourcing training and education programs
4. Establishing recruiting programs with leading supply chain schools
5. Removing employees that would not meet the vision
6. Hiring more advanced skillsets to fill the gaps
The whitepaper is full of other anecdotes that specify how training has benefitted the top performing organizations. Examples include the following excerpts:
- “Organizations that developed five-year training programs, including certifications and advanced degree programs, and placed recent graduates into their sourcing organizations were the most adept at margin improvement and expense reduction. In fact, these organizations had multi-tier training and education programs that were structured and tracked.”
- “Organizations like ISM and Next Level Purchasing have assisted sourcing organizations with moving their training and certification programs forward.”
- “Delivering savings to the bottom line continues to be the measure of high-performing sourcing teams, and achieving bottom-line results requires investment in your sourcing employees…To reap your sourcing ROI, focus on employee skills and training, hiring the best individuals and as a foundation, and automating the entire sourcing business process…In today’s environment, picking up 10 to 15 cents of every dollar spent is critical to your company’s survival. Don’t leave money on the table.”
Though this whitepaper is only five pages long and I’ve given you several excerpts right here, it is actually packed – packed! – with additional information. If purchasing training is top of mind for you and you need to justify training to your management, it’s probably a good whitepaper to have. You can download your own copy from Ariba’s Web site (registration required).
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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