Procurement training:

Step 1: Identifying Opportunities

Category Opportunity Questionnaire

Step 2: Prioritize Opportunities

Lesson 4: Building Case Study

1. Articulate why the initiative is worth pursuing, what it will accomplish and how the
organization will benefit from the initiative
2. Calculate the baseline spend, i.e, the do-nothing scenario where we assume a simple
continuation of history (same price, quantity, specifications, etc.)
3. Estimate the gross opportunity ( on price, quantity consumed, operations, customer
satisfaction, etc) from your Initiative. Approaches for estimating the opportunity include
benchmarks and should- cost analysis
4. Consider all incremental costs that your proposed change will create (e.g.,
investments, additional headcount)Also evaluate other, potentially difficult to
quantify, factors like negative customer reactions, change management difficulties,
regulatory issues, etc.

5. Calculate resulting target spend (the new baseline) for year 1 and beyond
6. Decide if pursuing the Initiative still makes sense in light of the benefits, costs to
implement, required tradeoffs, and capacity and capability of the organization to
implement the change

Lesson 5: Planning Implementation

1. Describe the main work to be done, timing, and milestones along the way, including an
unambiguous Money Step
2. Identify one owner for each milestone. The owner will be accountable for
completing their milestone(s)
3. Develop mitigation steps to deal with risks and address interdependencies with
other Initiatives
4. Define metrics that give us a snapshot of progress already made and an indication of
what to expect going forward
5. Develop a plan to engage all individuals and groups impacted by the Initiative or
essential to its implementation
Lesson 6: Performing a Should Cost-Analysis
Lesson 7: Selecting Suppliers
Lesson 8: Preparing for Negotiations
Lesson 9: Influencing Others

Lesson 10: managing Performance

 Value leakage in Procurement is the gap between planned and actual value.
1. Monitor KPIs proactively through rigorous performance dashboards. Dashboards
should include both leading and lagging KPIs.’
2. Use root cause analysis to determine the source of underperformance if leading
KPIs suggest a problem ahead or if lagging KPIs signal underperformance.
3. Act fast to fix the root cause of underperformance.If you conclude that an Initiative
will not be able to deliver the planned Impact, ensure the relevant stakeholders
understand why, revise the KPI targets, and close the gap with new Initiatives.
For tips on how to have courageous conversations with stakeholders, refer to the OILS
framework in the Start executing today module.