OMNIA Partners Connections 2019 was an even bigger success than we could have fathomed. The connections made across our entire community were impactful, strategic, and our attendees (and the OMNIA Partners team) left with valuable insights.
View the press release, award winners and sponsors
We have summarized a few of the key strategic findings that procurement/purchasing leaders and supplier partners uncovered during Connections 2019:
1. GPO Market Trends:
Procurement teams are finding there is and will be, as we head into 2020, a continued reduction in resources available to support efforts, more pressure to find additional leverage and savings (on top of the deep savings procurement has already achieved/negotiated year over year), and there is a greater emphasis on finding better, more effective partners. In addition to the pressures procurement is feeling from key stakeholders (and end-users), procurement teams are placing a greater emphasis on negotiating better service-level agreements, longer contract terms, more substantial rebates and a global platform/ pricing.
On the note of resource reduction, in most businesses, the perception is procurement only handles PO processing, in reality that is only 19% of procurement’s day-to-day efforts. Procurement is tasked with compliance, customer, and supplier management – these tasks take up an average of 22% of their overall daily engagements. Additionally, sourcing organizations report that contract creation, negotiation and approval takes an average of 31% of the total time required to complete the sourcing process. At OMNIA Connections 2019, during this session we learned alignment gaps could be blamed for some of this limited perception of procurement. Purchasing professionals need to reassert control over spend by identifying what they can do to be the differentiator.
Learn about the unique approach OMNIA Partners takes and how it increases speed to savings
2. Mergers and Acquisitions – Procurement Plays a BIG Role:
Mergers and acquisitions are a high-risk game with 70-90% estimated to fail per year. In the current competitive and evolving climate the difference between your company being part of the 70-90% fail rate versus being the 10-30% of success stories can be procurement!
25-40% of total cost savings potential is owned by procurement, this is where a company creates tangible value. A good portion of procurement synergy savings are immediate and also provide an opportunity for driving step-change improvement in target’s overall sourcing performance. Meaning, Procurement synergy is high impact and predictable. Further illustrating that procurement should be a key area of focus during supply chain integration since external spend represents 50-70% of the overall cost structure. The question procurement should be asking is, “how do I prepare for M&A so I can play a vital role in the overall result?” The answer is that procurement’s early engagement in crucial to the outcome and preparation should take place in 3 buckets: People, Process and Technology Some actions procurement can take during preparation of each bucket are:
- Establish and document organizational structures on both sides
- Ideally free up core team to be dedicated or mostly so (not just part-time)
- ID top performers and change agents
- Look at key, value-driving processes at both companies for source of best practice to share
- Need robust, multi-layer communications plan
- Synergies often cross functional boundaries, have a process in mind to include these
- Data can be a large source of misinformation, use AI and other tools to scrub for accuracy
- A GPO can be used as a partner to help identify and execute quick wins
3. The Leadership Gap – Impacting Lasting Success Through Leadership:
Being a true leader is no longer simply about your personal successes. True leaders are able to motivate and bring innovation to their company, their team, their industry, and so on - not only themselves. How can they do this? By building strong and meaningful relationships. Leaders are more than polite to their connections, they are demanding excellence from their team but doing so with personal care, helping to build the impactful relationships necessary for true success. To position yourself as a leader in your organization or industry you should locate the blind spots. Often it is easy to get caught by derailleurs and noise. It is hard to navigate away from those common pitfalls but necessary in order to locate blind spots and devise a succinct plan to attack them.
The power of partnerships is about developing meaningful relationships in and outside of the industry you are currently operating, in many cases, that is a core differentiator of a true leader. It is great to be a master at your craft and connect with your department, however, it is an even greater measurement of success to contribute to your overall community and develop impactful relationships in other industries and with new stakeholders.
The Leadership Impact and Procurement
Procurement is often spread thin with minimal resources, or consistently managing the same spend buckets when there are more strategic areas of spend being left unmanaged. This is where a GPO can help partner with procurement to free up some of procurement’s time allowing them to enact more strategic purchases and work with new stakeholders they have not engaged with in the past. Developing these relationships while diving into uncharted territories of spend, contributes to the overall growth of your leadership IQ. To further develop your leadership impact procurement should take advantage of resources that they have available to them to connect with these outside sources. For instance, if you are at an industry event turn on ‘Find Nearby’ in LinkedIn to engage with and network with your peers. Develop your professional network and connect in a more meaningful way to discover your inner leader.
To learn more about future event of OMNIA Partners and how you can attend visit our Conferences and Events page where you will always find an up to date listing of what we have upcoming!
Thank you to our OMNIA Partners Connections sponsors, supplier partners, members and speakers for attending! Discover what supplier partners took home awards and gain a run-down of the overall event.