I attended Spend Management Day in Boston yesterday. Lots of great presentations, roundtables and insights that I’ll do my best to share in the coming days. Hackett Group procurement practice leader Chris Sawchuk teed up the day well with his talk on the wild ride we’ve all experienced in the last 18 months and how world class organizations will come out of the other side of the storm.

Chris emphasized that companies must evolve to be “not just leaner” since “we’re all coming out of this leaner.” Instead they must take the lessons from this downturn to heart and make some deep, fundamental changes to their technology, skillsets and strategies.

In order to test the preparedness of an organization, Chris suggested 7 “considerations” - typically in the form of probing questions - that companies should consider:

1. “Are you adding high value procurement services and related capabilities to your service portfolio?” For example, Chris asked everyone how they’ve helped prepare for the potentially disruptive H1N1 virus or implemented working capital management to reduce risks.
2. “Are you increasingly thinking about managing procurement processes as services?” Chris and his colleagues have found that world class companies define services, service levels and metrics … and effectively manage relationships with internal customers.
3. “Are you adding higher value metrics to scorecards and gaining associated resources?” If the focus is supply risk, Chris urges you to reflect that in scorecards with measures like revenue at risk, profit at risk, and composite risk index.
4. “Have you helped the enterprise become more agile through better risk management and improvement of variable asset/cost structures?” In Chris’ view, this is the ability to move from “spent analysis” and into a more forward looking spend planning role.
5. “Are you making procurement more agile to deliver more capacity and savings?” For instance, Chris asked how well you handle “non-recurring business critical” expenditures since processing them effectively saves efficient companies 2% of their total indirect spend.
6. “Are you extracting procurement staff from low value processes and obtaining maximum value in p2p?” The goal is to move from transactional to strategic use of procurement resources.
7. “When the economy recovers, what will your suppliers do? Innovate with you or retaliate?” Echoing a theme we’ve discussed here before, Chris says “now is the time to become customer of choice.”

Lots of good food for thought … especially if you can answer “yes” to some of the questions.

Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.