Is Procurement Saving All It Can Be Saving?
What Do Procurement’s Internal Customers Want To Save?
PurchTips Edition #401
Ask a group of procurement professionals the question “What do you save for your internal customers?” and the majority will answer “Money!” But, there’s actually something additional you could save your internal customers that they would value more: time. Why would they value time more than money?
Well, first of all, the money you save isn’t really theirs. It’s the organization’s money. And while it may be nice for them to be able to accomplish all they need to within a tight budget, saving them money won’t always make them passionate about how great the procurement department is. They may actually get their budgets reduced if they don’t spend it all!
However, saving them time is a more personal benefit. They’ll have less frustration and stress. They’ll get to leave work at a decent hour. Their teams will have higher morale. And procurement’s customer satisfaction rating will reflect that.
One of the benefits of having higher procurement customer satisfaction is that you will be able to get better cooperation when implementing new procurement initiatives. But, while we have thus far talked about happier internal customers and a more popular procurement department, saving internal customers time has organizational benefits just like lower prices on products and services do.
If you save internal customers time, you can translate that time savings into monetary benefit. For example, if you improve a procurement process where an administrative assistant no longer has to spend five hours a month checking office supply stock and reordering supplies, you can multiply her $15/hour wage by five hours by 12 months to get $900 in annual savings. Time savings converted to monetary savings can be disputed, however. So, savings claims will be most credible if paid employee overtime is reduced, open positions no longer need to be filled, or headcount is reduced.
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Copyright 2018. This article is the property of the Next Level Purchasing Association and may not be copied or republished in any form without the express written consent of the Next Level Purchasing Association. Click here to request republishing permission.
By Charles Dominick, SPSM, SPSM2, SPSM3
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