Best Of Cost Management Value Beyond Savings

102: How to Understand Cost & Enable Fact Based Supplier Relationships w/ Jimmy Anklesaria

Jimmy Anklesaria is one of the most prominent thought leaders in procurement today.

Jimmy is considered by many as the go-to expert when it comes to the strategic management of cost. He literally wrote the book (well, two books), and regularly travels the globe helping organizations reduce their third party costs. Importantly, he does this not through the leveraging of power but by using data as the foundation of fact based sourcing and continuous improvement.

Jimmy had so much information to share that we recorded two separate shows! These cover the strategic management of cost from initial sourcing to end of contract. Today, we focus on the initial sourcing and negotiation process…

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“Just knowing the cost is a good thing, but not enough – that is just the foundation of a cost management strategy. You have to understand cost before you can manage it.”

In this episode, you will learn:

  • Why as a young company Director he did not understand the importance of procurement, and what his light bulb moment was.
  • The most important part of the negotiation process
  • Why business deals have to be win-win to be sustainable over the long term
  • What a procurement professional can do to better understand the cost of a product or service before they begin a negotiation
  • How you can use publicly available information to develop should-cost models based on understanding key cost drivers
  • Whether you need to pay for data or not.
  • Why, while you can acquire data from third parties or a central COE, a procurement professional must not abdicate responsibility for understanding the costs and cost drivers of a product or service.

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About the author

Philip Ideson

Philip Ideson is passionate about the role that procurement professionals and leaders can plan in creating competitive advantage for their organizations in ways that go beyond the traditional value proposition.

Philip founded Art of Procurement as a way for the procurement community to learn from each other, increasing the impact they have on their organizations. In 2017, he co-founded Palambridge, a virtual platform of procurement experts, technology, and intelligence. Palambridge provides a broad range of flexible procurement solutions, available on-demand.

Prior to Art of Procurement and Palambridge, Philip enjoyed a career that spanned the procurement value chain, working across three continents for organizations such as Accenture, Procurian, Ally Financial, Pfizer and Ford Motor Company.