Friday, 23 December 2016

Why spend prioritisation tools are a new CPOs best friend

Procurement people like to move around, and it’s not uncommon for a department to get a new CPO every 2-3 years. A new CPO has a large task ahead of them. Usually, their goal is to make savings in the department and provide better value for the company. Where do you start?

Related image

It’s a daunting task. If you’re lucky, you’ll have category managers who have done their spend analysis and will give you some data to start with. If you’re not, your first task is going to be asking your new team to go away and come back with an idea of where your current spend is. 

How do you go from this spend analysis to working out which areas you should hit for maximum effect? 

Traditionally you could go to each of your category managers and ask them to make a judgement call on where their largest areas of addressable spend are and how much of a percentage saving they feel like they can make. 

This is fraught with risk, however. Those in the industry for a long time and many a procurement consultant will be able to tell you that large spends aren’t always addressable. There’s also the problem of personal interpretation - one of your category managers could be inherently pessimistic and only suggest a 1% saving when actually 5% is possible. A naturally optimistic category head may tell you that 10% savings can be made when you’re actually at the market price already.

Having a way to centralise and interpret this data in an unbiased way is incredibly important. That’s why we created Category Dojo to help new CPOs and Heads of Procurement find the low hanging fruit and quick wins to fill their spend pipeline when they join a new company. 


Category Dojo looks at a multitude of factors such as how important you are to a particular supplier and how important they are to you. It looks at when you last tendered a particular product and how the market has moved since then. It will give you advice on what to hit first and what to avoid because you’re already in a strong position. 

It makes your life as a new CPO much, much easier.

Try out Category Dojo - it might make your new job a lot easier

Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

0 comments:

Post a Comment