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Having more than 20 years’ experience as Procurement professional and consultant, I am fortunate to have frequent contact with Procurement executives across multiple industries. From these conversations, I can assure you this: all companies, big and small, are grappling with the accelerated business changes brought on by the Covid-19 global pandemic. In a recent conversation with Phil Fersht from HFS, we discussed this widespread impact. Phil juxtaposed business trends from 2 months ago with what we can expect to see in the next 2 months in a unique way that I would like to share here:
Some relatable examples include moving to a home office, quickly embracing a digital approach, and increasing the focus on savings and cost reduction. Your business is likely to also be facing some or many of these Covid19 challenges:
Significant cost & margin pressure with lower revenues
High volatility in commodity prices
Global supply chain disruptions
Suppliers at risk of bankruptcy
Strained Procurement capacity
Significant cash flow pressure
Extraordinary expenses incurred
While the outlook may seem grim, I have good news for all procurement leaders out there: Now is the time for you to lead the path out of this disrupted economy. As Alpar Kamber recently said at the SIG Virtual Summit, “The topic for procurement has always been around how do we get more attention for Procurement? How do we get a seat at the table so we can influence spend and influence decision-making? Well, now is the time! We have the attention. And now, the question is, what will we do about it?” You can listen to that conversation here.
Procurement is being called to support economic recovery. The function is best illustrated by an ecosystem that supports the entire business through cost savings, strategic value creation, process and efficiency improvements, innovation, risk mitigation, and digitalization. While we know from our recent benchmark study that high-performing Procurement teams have a well-defined 3-5 year vision, it’s likely most of these agile and best of breed teams will shift their focus to help their business with savings generation. No matter which industry you belong to, I guarantee that if you help your business save money and reduce risk, you will earn that seat at the table. Rapid savings project ideas are the first thing you should put on your agenda for meetings with internal stakeholders and the C-Suite. With the right focus, you can help achieve savings, mitigate risks and plan for the future.
And what about transformation? Interestingly, we have noticed an initial freeze of transformation initiatives, but that did not last. 2020 appears to be a great year to accelerate and launch transformation dreams as the business disruption triggers a real sense of urgency and eradicates previous aversions to change. This is a time to push the digital agenda of your Procurement organization, and challenge your operating model to achieve more efficiency, speed, and resilience. For more tips on becoming a strategic partner in the digital age, check out our Harvard Business Review article here.
To hit the ground running as the economy and businesses re-open over the coming months, you should have already figured out your plan of attack. Experts warn us on the risk of future pandemic waves until we have a vaccine. So, at any given time, your business could endure “lockdown” again. You want to be ready for that moment while still playing a much-needed cost-down role to support business recovery.
Focus on Sourcing and re-sourcing: What categories can you focus on to make the biggest impact now? Look for local suppliers and alternative sources for supply to mitigate risks. Consider using tools like eAuctions for competitive categories, a few of which we cover in our SME Procurement Pro-Tip Series. This will likely require you to re-prioritize your sourcing plan so you can adapt to the different business environment. Increase your throughput and drive your new supplier strategy; now is the time.
Dive into contract negotiations: Look at your existing contracts. Open your contracts for review and consider any terms you can adjust, use, or change to drive more savings for your business now. Challenge, revisit and adjust; now is the time.
Pay attention to your untapped potentials: Carry out again a thorough review of your spend data, identify new opportunities, go after any sacred cows, figure out your Tail Spend strategy, review your payment and discount terms. Secure better actionable insights and push the frontiers; now is the time.
Leverage digital enablers: Digital solutions are plentiful to drive competitive bidding and eAuctions, automate tactical tasks, improve compliance, etc. Do you have them but fail to leverage them? Should you invest further? Jump on that digital transformation opportunity fueled by the need to recover financial strength quickly. Create your best of breed ecosystem. Enhance your speed, efficiency and resilience; now is the time.
If you are ready to have a razor-sharp focus on savings, mobilize your category experts to achieve a positive financial impact, but do this swiftly. And if your potential to achieve greater results is constrained by your available skillsets or bandwidth, get some external help. Many options are available in the market. At WNS-Denali, we can leverage our category teams, sourcing experience and digital solutions to co-create a program tailored to your needs. In fact, we have a unique outcome-based model for rapid savings that delivers a guaranteed financial upside.
To learn how this program can work for you, contact us here or connect with me on LinkedIn. I am happy answer any pressing questions about your savings goals and share success stories.
Stay safe, stay strong, and seize the moment to shine.
Senior Vice President, Sales
Denis Royer is Senior Vice President of Sales in EMEA at WNS-Denali. Denis has 20+ years of experience in procurement, Business Process Management, risk management and business transformation. Denis honed his skills in a variety of roles, including CPO, Group Director of Supply Management, Managing Director, Global Head of Sales and Marketing and Entrepreneur. Prior to WNS he held global leadership roles at Xchanging Procurement Services, KnightRidder SSC, Media Consortium, PwC, Nortel Networks, and Liebherr Aerospace. He holds Master’s degrees from Georgia Tech and Grenoble EM.