Matthew Merker, Senior Analyst, Management Consulting Research with ALM Consult-
ing Intelligence caught up with David Schannon, Partner, Bain & Company to discuss the
firm’s Procurement Consulting Practice, including trends in the market, the impact of digi-
tization and the next evolution of procurement consulting.
Q&A with Bain & Company’s David Schannon
: Tell us about
Bain & Co.’s Procurement Practice?
Schannon: At Bain & Company, we believe that a company’s external spend
can be one of the greatest sources of
value that is often not managed to full
potential. Bain’s procurement practice
addresses this by helping companies
transform their procurement functions
to be more strategically focused, accelerating the procurement organization up
the maturity curve and driving a step-change in value to the bottom line. We
typically engage with CPOs, CFOs, and
business unit leaders on transformational savings programs focused on improving spend holistically, using both “Buy
Better” (price negotiation, supplier selection) and “Spend Better” (demand
management, specification optimization, total system cost reduction) levers.
We bring procurement together with
finance and decision makers in the business to both optimize spend and ensure
savings is tracked into budgets and in
the P&L. We heavily emphasize capability building, setting our clients up to
continue generating value over time,
long after we are gone.
: What are the ma-
jor trends that you are seeing?
Schannon: One major trend is an
increasing interest and emphasis on
Digital Procurement. The use cases
and benefits are becoming clearer, and
executives are expected to be operating
in a digital world. Meanwhile, according
to Bain’s research, 80 percent of
procurement executives believe they are
not engaging enough with new digital
solutions. This universe of technology
solutions and tools is exploding and
procurement teams are often struggling
to navigate this landscape and craft a
coherent plan. Another trend we are
seeing is around agility. As businesses,
supply chains, and the broader macro-
economic and geo-political landscapes
are changing more rapidly than ever
before, procurement executives are
recognizing the need to be more agile
and have the ability to change course
on a moment’s notice.
: How is Bain adapt-
ing to these trends?
Schannon: On the digital front, we are
increasingly supporting clients on the
topic of Digital Procurement, in two
ways. First, we are helping clients
create a digital strategy and roadmap
for how to use digital technologies to
improve the effectiveness and efficiency
of the procurement function. Second,
we are helping elevate our clients’
procurement teams’ role in supporting
the broader businesses’ digital vision.
With their knowledge of supply markets
and access to innovative suppliers,
strategically oriented procurement
teams can play a significant role in
helping their companies accelerate
innovation. On the agility front, we are
helping clients shift their resources from
focusing mainly on reactive, operational
work to more strategic, proactive work
such as category management. This
allows procurement teams to be more
agile, as they are spending more time
anticipating risks and disruptions, and
setting their supply base up to be able to
adapt if changes are required.
: How do you keep
the human element in procurement?
Schannon: The digitization of
procurement processes will be a
huge unlock for companies who have
struggled to move up the maturity
curve. Most procurement organizations
are resource constrained, and have to
focus too much of their resources’ time
on operational procurement, leaving
less resource available for strategic
: What’s the next
evolution in procurement consulting?
Schannon: Most firms that do
procurement consulting have a
heavy focus on optimizing within the
confines of the world of procurement.
As procurement organizations are
increasingly getting the basics right
within their silo of control, consulting
firms will need to demonstrate an
ability to drive cross-functional value—
understanding the broader business
context and establishing procurement
as a true influential business partner—
in order to stay relevant to their clients.