Selling procurement’s business case

You’ve been asked to give a procurement presentation to executives. What should you include?

While it’s impossible to give a list of procurement presentation topics that will please every executive every time, Charles Dominick of Next Level Purchasing says there are four common topics that appeal to most executives.

1. Return on Investment
Salaries, benefits, computers, offices, technology, and training are just a few of the expenses that are incurred because the procurement department exists. But good procurement departments also save money and some even generate revenue.

Additional savings and revenue can be referred to as “procurement value”. Showing how much procurement value (in Rands) is being generated for every Rand spent on procurement expenses is the organisation’s return on investment in procurement – a key executive measurement.

2. Continuous Improvement
Executives want their organisations to get better all the time. So, show executives how your relevant procurement performance measures are improving over time. For example, executives would love to see every year’s procurement cost savings being higher than the previous year’s.

3. Performance vs. the Industry
Executives strive to make their organisations best-in-class. Gather industry statistics, benchmark your procurement department, and share how you compare. Hopefully, you’re performing better.

4. Contribution to Organisational Goals
Executives want to know how their teams are supporting organisational goals. Know precisely what those organisational goals are and the key performance indicators (KPI’s) used to evaluate success. Then illustrate how procurement activity is contributing to the goals. For example, if a KPI is earnings per share (EPS), show how much EPS the procurement team has contributed through its work.

…be sure to use clear charts and avoid jargon when delivering your procurement presentation.

Commerce Edge is hosting a course on selling procurement business cases on 29 August 2012.

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