SBP030: 5 Procurement Tips to move the needle
Roger Knocker • January 31, 2024
SBP030: 5 Procurement Tips to move the needle
In this episode of the Smart Business Performance Podcast, Roger welcomes Derek Kinnear and discusses the 5 Procurement Tips to move the bottom-line needle. This episode will boost your Business procurement to a whole new level!
Derek is the former Managing Director of Bidvest Group Procurement since 2009.
He was the Chairman managing the procurement of the 2013 FIFA Confederations Cup and the FIFA 2014 Brazilian Football World Cup.
Prior to that, he was the CEO of Group Procurement at FNB (First National Bank) and a Financial Services Charter Committee Member.
Tune in now and make sure to take away the notes with you!
5 Procurement Tips to move the needle are:
[01:01] Derek thinks that the World Cup experience was interesting. He thought of using most of the procurement process as the base of the 2014 World Cup. He joined Bidvest in 2009 and prioritised providing a great experience to everyone.
[05:40] Derek thinks that the easiest onset to get the cohesion going was with difficulty. A lot of the emphasis throughout the process was driven from a financial perspective.
[09:36] He explains his approach towards procurements in that environment.
[12:33] He unfolds the 5 Procurement Tips to move the bottom-line needle and elucidates the first procurement tip with the help of some intriguing examples.
[22:35] He further emphasize the need to pursue initiatives significantly higher than the CPI rate while clarifying the basic principle of 80-20 (Pareto Principle).
[30:06] You need people at a lower level. The only way you will translate that kind of financial result is through Key Performance Indicators (KPIs) that drive the Executives as well as operational people.
[38:38] If you’re chasing only one criterion, and that’s the price, then you will be doing yourself an injustice and you are going to do the organisation a massive injustice.
[50:45] Derek explains that if you can put all the above tips together, it could be the best-kept secret in the world. What you must do is to communicate!
About Our Sponsor:
KPI Management Solutions helps organisations to meet their Stretch Goals using KPIs, OKRs, AI-enabled Technology and Training. KPI offers advanced data-driven Procurement Performance services in association with Derek Kinnear.
Download the KPI Spreadsheet for FREE for a limited time only.
Connect with Derek: Info@nxttxn.com Ring him up at +27 83 327 0001
If you enjoyed this episode of the Smart Business Performance Podcast, then make sure to subscribe to our podcast.
Derek is the former Managing Director of Bidvest Group Procurement since 2009.
He was the Chairman managing the procurement of the 2013 FIFA Confederations Cup and the FIFA 2014 Brazilian Football World Cup.
Prior to that, he was the CEO of Group Procurement at FNB (First National Bank) and a Financial Services Charter Committee Member.
Tune in now and make sure to take away the notes with you!
5 Procurement Tips to move the needle are:
- Run Procurement as a profit centre.
- If savings is the mandate: then the initiatives must exceed CPI.
- Monitor KPI’s, using clean data.
- Ensure you adopt collaborative programs and relationships with your Partners / Suppliers.
- Communicate regularly with your Target audience (internal and external stakeholders).
Conversation Highlights:
[01:01] Derek thinks that the World Cup experience was interesting. He thought of using most of the procurement process as the base of the 2014 World Cup. He joined Bidvest in 2009 and prioritised providing a great experience to everyone.
[05:40] Derek thinks that the easiest onset to get the cohesion going was with difficulty. A lot of the emphasis throughout the process was driven from a financial perspective.
[09:36] He explains his approach towards procurements in that environment.
[12:33] He unfolds the 5 Procurement Tips to move the bottom-line needle and elucidates the first procurement tip with the help of some intriguing examples.
[22:35] He further emphasize the need to pursue initiatives significantly higher than the CPI rate while clarifying the basic principle of 80-20 (Pareto Principle).
[30:06] You need people at a lower level. The only way you will translate that kind of financial result is through Key Performance Indicators (KPIs) that drive the Executives as well as operational people.
[38:38] If you’re chasing only one criterion, and that’s the price, then you will be doing yourself an injustice and you are going to do the organisation a massive injustice.
[50:45] Derek explains that if you can put all the above tips together, it could be the best-kept secret in the world. What you must do is to communicate!
About Our Sponsor:
KPI Management Solutions helps organisations to meet their Stretch Goals using KPIs, OKRs, AI-enabled Technology and Training. KPI offers advanced data-driven Procurement Performance services in association with Derek Kinnear.
Download the KPI Spreadsheet for FREE for a limited time only.
Connect with Derek: Info@nxttxn.com Ring him up at +27 83 327 0001
If you enjoyed this episode of the Smart Business Performance Podcast, then make sure to subscribe to our podcast.
Financial Planning and Analysis (FP&A) refers to a core corporate function that drives informed decision-making through budgeting, forecasting, financial modelling, variance analysis, and performance management. Unlike general accounting, which focuses on historical transactions and compliance, FP&A plays a forward-looking and strategic role within organisations. It transforms financial data into actionable insights that guide corporate strategies. At its core, FP&A is concerned with understanding the financial implications of business activities. It creates visibility across departments, enabling leadership to align resources with organisational goals. While traditional accounting departments close the books and ensure compliance, FP&A teams are tasked with answering questions such as, "What will happen next quarter?" and "How can we reallocate capital to drive growth?"
In the world of finance, numbers tell a story. However, that story is often buried beneath layers of spreadsheets and complex datasets. For financial professionals, the challenge is not just about understanding these numbers but also presenting them in a way that drives decision-making and inspires action. Enter data visualisation – the art of transforming data into clear, compelling visuals. Among the tools that have proven especially powerful are the line graph and the waterfall chart. These visuals help finance teams translate dry statistics into impactful narratives. In this article, we explore how these graphs can transform financial storytelling. The Importance of Data Visualisation in Finance Finance professionals are accustomed to handling vast amounts of data, from profit margins and revenue growth to expense tracking and risk assessments. Yet, presenting these figures effectively to stakeholders is a different ballgame. Visualisation simplifies this process, turning complex data sets into accessible insights. When done correctly, data visualisation: Enhances comprehension: Humans process visuals 60,000 times faster than text, making it easier for stakeholders to grasp key information quickly. Drives decision-making: Clear and compelling visuals help executives make informed decisions without wading through dense reports. Highlights trends and outliers: Visual tools can bring hidden trends and anomalies to light, prompting timely actions. Improves understanding and communication with business - Business doesn't always get what Finance is trying to communicate and good visualisations go a long way to bridging the gap. Better communication improves alignment to strategic financial goals. The line Graph: Unravelling Trends Over Time The line graph, also known as a stream graph or a stacked area graph, is a powerful tool for visualising changes in data over time. It is especially effective in showing how multiple categories contribute to an overall trend. In finance, line graphs can illustrate revenue streams, expense categories, or investment performance in a visually engaging manner. Use Case: Revenue Streams Analysis Imagine a financial report for a company with diverse revenue streams, such as product sales, services, and subscriptions. A line graph can display how each stream has evolved, highlighting peaks and troughs. The thickness of each ‘line’ represents the contribution of that revenue stream to the total, making it easy to spot which areas drive growth. Benefits of line Graphs: Trends Made Simple: Displays how multiple components evolve over time. Visual Impact: The fluid, organic design makes it easier to follow changes. Comparative Insight: Helps compare different categories intuitively. The Waterfall Chart: Bridging the Gap Between Figures Waterfall charts excel at breaking down the cumulative effect of sequential data points, making them ideal for financial analysis. They help bridge the gap between figures by showing how individual elements contribute to a total. Commonly used in profit and loss statements, budget analysis, and variance reports, these charts provide clarity in understanding how specific actions impact the bottom line. Use Case: Profit and Loss Analysis A financial analyst preparing a quarterly report might use a waterfall chart to demonstrate how various factors—like increased sales, higher marketing spend, and cost savings—impacted net profit. The chart’s structure, with its clear progression from starting figures to the final result, makes it easy for stakeholders to follow the financial narrative. Benefits of Waterfall Charts: Clarity: Simplifies complex financial data by showing individual contributions to total figures. Transparency: Clearly distinguishes between positive and negative impacts. Decision Support: Helps executives understand the key drivers of financial performance. Choosing the Right Visual for the Right Data Selecting the appropriate visual tool depends on the story you want to tell: Use line graphs for illustrating trends across multiple categories over time. Opt for waterfall charts when you need to detail the step-by-step impact of specific factors on an overall financial figure. By mastering these tools, finance professionals can enhance their storytelling, transforming raw data into insights that drive strategic decisions. Conclusion: From Data to Decisions The ability to visualise data effectively is a powerful advantage. The line graph and waterfall chart are more than just visual aids—they are essential tools for financial professionals looking to make data-driven decisions that resonate with stakeholders. By adopting these techniques, finance teams can turn numbers into narratives that not only inform but also inspire action. In the end, the power of finance lies not just in analysing data but in presenting it with impact.
