While making fun of the way governments purchase has long been a good source of humor in spend management circles, the deficit news coming out now leads one to believe that it is now time to really make something happen.

What do you think? How would you make this happen? Is it a lost cause?

Ariba has jumped into the fray several times and has even set up, with the help of some public sector experts, a toolkit for public sector professionals to get started.

The value that has been realized by the private sector from the institution of advanced sourcing, contracting, procurement and payment techniques has been staggering. Many in the private sector look at this and think “if only we could do this for the government and, even more, the taxpayer”. Despite the very real challenges, the potential value from broad implementation of Spend Management in the public sector is enormous. Cost savings is just one of the benefits:

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Toyota consistently ranks among the most respected global corporations and is well-known for their manufacturing prowess and strong supplier ties. That’s exactly why this week’s news about the accelerator problems for 4 million vehicles came as a shock to so many of us. The impact of this episode will be long-term, far-reaching, and very expensive.

Supply risk specialists speak often about the three distinct kinds of supply risk (Brand, Commodity, and Disruption). While this episode at Toyota may not have hit a trifecta, they are certainly dealing with an awful daily double. The only thing that might be more expensive than the disruptions in their supply chain could be the hit to their brand.

If you think that only your biggest suppliers need to be involved in a formal supply risk management program (e.g. automated alerts and scorecards populated by both objective and subjective data inputs from various sources as one component) and the rest can be covered with just some historical financial information/ratios, on-time delivery ratios, and maybe an annual business review, think about the fact that CTS is almost certainly not even in the top 500 of Toyota’s list of largest suppliers.

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Regardless of who might have authorship rights (Pimco? Ariba? Others?), the concept of “The New Normal” has definitely caught on in both the mainstream media and spend management circles .

However, it’s important to remember that “the New Normal” doesn’t translate directly to “permanent low GDP growth” as has been put forth by some investment advisors.

Instead, the New Normal is characterized by several trends that will, over time, become “SOP” for most large organizations:

1. Increased need for agility to respond more quickly to rapid change whether that’s in commodity markets, geopolitical supply risk, regulatory environments, or good old-fashioned competition.

2. Fewer permanent resources and increased reliance

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A lot of Supply Excellence readers are members of the Strategic Sourcing & Procurement Group on LinkedIn and may have seen the lively discussion in December on how the Group can become a more valuable resource in 2010. Out of that discussion, the idea to have regular conference calls to tap into the Group’s collective brainpower was born.

I’m thrilled to announce that the first call is this Friday featuring the Hackett Group’s Chris Sawchuck. Chris will cover Hackett’s research on the “key issues” companies will face in 2010 and then open the floor for an interactive discussion.

The only catch…the call is for Group members only. So you must be a member of the Strategic Sourcing & Procurement group on LinkedIn to get the dial in number (you can request to join here). The details - including international dial in numbers and time - here.

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.

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While the past 12 months represent the most trying economic climate since the Great Depression with hardships experienced seemingly around every turn, from a strategic sourcing perspective, the recession can best be summed up in one word - opportunity. With commodity prices plummeting almost across the board and suppliers desperate for business, the strategic sourcing environment has been primed like never before in most of our lifetimes.

But how long will these conditions continue? Experts disagree, but most concede that the shoots of a recovery continue to become more prominent. No one can be certain of when, we will come out of this recessionary period and move back into times of economic prosperity. The question is - what have we learned? As of early 2010, unemployment is exceeding 10%, Hackett Group research suggests that less than half of these lost positions will be re-staffed meaning that enterprises will have to do more than less in the ‘New Normal’. Those who embrace this new normal state of affairs will prosper through what will almost certainly continue to be an uncertain economy.

Based on external research and input from Ariba customers and prospects, presented here are 10 ways to re-examine your strategic sourcing organization.

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