There are many ways that procurement brings financial value to an organisation – from the consistent delivery of year-on-year savings and cost avoidance to the strengthening of working capital positions and cash flow.
But perhaps the most progressive of impacts that CPOs can pursue is to drive revenue generation – using procurement’s powers and relationships to deliver top-line impact. This is the holy grail; the realisation of procurement having reached a point in its maturity where the function can focus significant resource to pursuing new business opportunities.
So, it was gratifying to hear a recent presentation during a recent Procurement Leaders CPO call about how one global bank has a tangible approach to just this topic. The call, which was aptly titled Next Generation Procurement, was attended by around 25 CPOs from a mix of industries. From the conversation, it was clear that while there was a large amount of interest, there wasn’t so much experience of systemising revenue generation.
In the case of the bank that was sharing its approach, however, a specific programme called Procurement Enabled Revenue (PER) had been developed that utilised several different levers to deliver growth. I won’t share the details here, but we’re talking significant revenue and profit impact. And, by extension, an entirely different perception among other business stakeholders as to what procurement can do.
During the call, one attendee asked whether the bank had any concerns about the team becoming distracted from the main deliverables of procurement by initiatives that might be seen as new and “sexy”. Managing cost and risk is super important, but revenue is the lifeblood of every organisation after all.
The answer was a resounding “no”. The pursuit of PER (to introduce yet another acronym to the world of procurement) was a clear value add and would, and should, never be treated as core.
But for this particular organisation, a focus on how procurement could use its capabilities and skills to positively impact the top line had resulted in significant impact. Maybe put Procurement Enabled Revenue – or PER, if you’re a fan of TLAs (three-letter acronyms) – on your list of potential opportunities for 2025.
Taking time to celebrate excellence
In case you missed it, entries for the World Procurement Awards 2025 are now open. It’s timely, then, that throughout October several WPA 2024 winners are sharing insights into their prize-winning initiatives with Procurement Leaders’ Strategy Cohort members, further showcasing procurement’s ever-growing value and impact.
The Awards are an important way of recognising the outstanding projects, individuals and teams shaping the future of the function, and taking the time to draft a strong, well-evidenced entry is time well spent – as our Cohort speakers will confirm.
Visit the website to view the categories and criteria, and make a note of that all-important entry deadline: 20 December. Good luck!
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