In procurement, total cost of ownership is a vital and widely tracked metric as it is more useful and insightful than “lowest cost.” However, even it has limitations mainly because it positions procurement function’s contributions as solely monetary.
Our research reveals that leading procurement organizations seeks to raise the total value of ownership for the organization. In addition to reducing costs, it helps accelerate growth; improve profitability and competitive strength; mitigate risk; enable operational efficiency; and foster innovation. Accenture has been analyzing the nature of total value of ownership and has identified 48 specific levers that procurement organizations can combine to help raise total value of ownership.
To help procurement decision makers sort through the options, Accenture has organized the 48 procurement levers into a deck of playing cards, with a lever on each of the 48 cards.
As the cards increase in value, so does the sophistication of the lever and associated effort required.
These levers are organized into four categories that include:
Risk and sustainability
Usage and innovation
Process and operational efficiency
Our “Winning Hand” methodology offers a systematic approach to help you find new ways to raise the procurement function’s contribution to business success. The idea here isn’t to select all the levers at once, but to shape a top- and bottom-line focused strategy by choosing the right group of levers for a specific category of spend.
Accenture’s “Winning Hand” methodology considers three criteria to recommend the right set of levers for a particular category of spend:
The complexity of managing the category.
The criticality of the category to the organization.
The capability of the procurement organization to execute on advanced value management strategies.
These criteria act as filters that produce a calibrated set of levers applicable to a given situation. Based on your input, the “Winning Hand” application helps you select the best levers to solve purchase issues and reposition your procurement function as a strategic player within the organization.
Explore how a leading consumer goods company used the “Winning Hand” application to better manage price across multiple vendors, track spend, develop new recycling and reuse programs, and streamline the purchasing process.