Academy Insider Vol 3 – Winter 2015-2016

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Upcoming Denali Academy Training

Category Management Excellence: April 5-6, 2016; San Francisco Bay Area
Category Management Excellence: April 19-20, 2016; Pittsburgh, PA
Category Management Foundation: May 3-4, 2016; Pittsburgh, PA
Category Management Foundation: May 17-18, 2016; Bellevue, WA


Message from the Editor

Welcome to the Winter 2016 edition of Academy Insider! In this issue, we’ll discuss how important it is for today’s procurement organization to map out future development through learning paths. Learning paths are a great tool to improve skillsets and take category management to the next level.

We’ll also delve into the key differences between category management and strategic sourcing. What we’ve been seeing is that many companies are struggling with the concept of true, holistic category management and are not fully embracing the intrinsic value that it provides. We’ve heard mature sourcing organizations are saying that they don’t need it, or that they’re already doing it, when in actuality they’re not. We’ll examine key differences and how procurement can drive more value beyond the cost savings. As always, your input or thoughts on these topics are always welcome.

Susanne Wrage
Director, Denali Academy



Strategic Sourcing vs. Category Management: Procurement’s Evolution to Drive Greater Value

Many procurement organizations today are struggling to understand the key differences between strategic sourcing and category management. Sure, they both drive cost savings but what other measurable value does category management provide over strategic sourcing?

Oftentimes, procurement professionals view this new era of category management as the natural evolution of strategic sourcing. Procurement once began as a tactical buying/purchasing role and over the decades has transformed into strategic sourcing, driving greater value for the enterprise by capturing cost savings through competitive bidding and negotiations. However, in order to take the organization to the next level, the critical next step is to shift focus to category management. Category management requires advancing skillsets, mindsets, and modes of operation in order to achieve breakthrough value.

In order to transition to category management, it’s essential to develop holistic, long-term category strategies that consider corporate, stakeholder and procurement strategies. Category management benefits the entire organization as it:

  • Raises the strategic contribution of procurement to business objectives
  • Proactively seeks stakeholder commitment to results
  • Improves total cost of ownership
  • Reduces risk in the supply chain
  • Uses resources more effectively
  • Fulfills stakeholder requirement in terms of availability, quality, and service levels
  • Fosters supplier innovation and capability development

While category management shares many common attributes with strategic sourcing (cost savings, risk reduction—both supplier and supply chain, and sustainability), a key difference is that category management adopts a portfolio and holistic procurement approach. Category management efforts go beyond managing individual projects–beyond managing what can be called “sourceable spend” that focuses on delivering cost savings for an individual project. Instead, it manages an entire portfolio as a whole with a vision, strategy, and SMART goals.

Category management shifts the procurement organization into more of a strategic business partner by bringing internal value creation into focus, rather than focusing on creating more competition in the market. It’s a programmatic approach that better ties in with stakeholder value and elevates procurement’s role within the enterprise.

Of course, creating more competition in the market and realizing cost savings will always remain important. Category management complements that approach with an additional planning level that adds value, as it provides category managers with additional levers available to them. Creating true category management capabilities within the organization requires creating the new skillsets that support category and business objectives. It requires leadership support from all levels of the enterprise. Category managers must also hone necessary soft skills, such as stakeholder engagement, change management, effective communication, negotiation, team building, and change management.

Measuring procurement’s value in terms of cost savings will likely never go away. However, effective category management can add sources of value creation, which can be measured in terms of procurement’s contribution to growth and supplier innovation. We’ll be expanding more on this concept in the next Academy Insider.

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Learning Paths: Charting a Course to Enhance Procurement’s Value

Today’s procurement organizations are finding that employing a learning path approach to employee development is proving itself extremely beneficial towards becoming a truly strategic team.

Learning paths allow leadership to a select a purposeful sequence of learning activities on which individuals can build knowledge progressively. This approach instills a consistent development process and set of learning principles, and can produce measureable results—particularly when they focus on critical tasks and functions within an organization, such as category management.

The learning path methodology developed by Jim Williams and Steve Rosenbaum is an ideal sequence of learning activities that drives employees to reach proficiency in their job in the shortest possible time. Learning paths are created for the entire job done by an employee. By looking at learning as a complete process rather than a single event, a learning path enables employers and employees to find new ways to drive out time, waste and variability in training, which leads to improved results and reduced costs. Learning paths have been proven to reduce time to proficiency by 30 to 50 percent.

Many organizations struggle with having sufficient return on investment for training, or “return on education.” They send learners to expensive classroom trainings, but don’t necessarily see the change in the behaviors that they are hoping to drive. This is where learning paths can greatly increase return on education, as learning is most effective when it’s an integral part of a comprehensive organizational process for change management. Successful learning first identifies the desired competencies of a successful category manager, assesses team members to identify gaps, and then maps a purposeful learning sequence to achieve the necessary skills. The preferred outcome is that a category manager is able to align focus with stakeholder strategies in order to drive the most value. Effective procurement organizations recognize not only the importance of good training, but the importance of a consistent knowledge development process, that can maximize the use of available training, technology, and tools and increase procurement’s overall success. If you’re ready to advance your organization to the next level and achieve learning goals, the next steps are to:

  • Create a Skills Profile: This defines the breath of skills and identifies the desired result.
  • Perform a Skill-Gap Analysis: This determines what skills are lacking in an individual or the organization.
  • Design Training Opportunities: Training is most valuable when gaps in skillsets are identified and the course content is geared appropriately to address them.
  • Develop a Learning Path: The desired outcome is an actual learning path designed to provide the desired skill level to achieve desired goals.


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Did You Know? Facts About eLearning


  • Companies are now increasing their use of eLearning regardless of size; and 41.7% of global Fortune 500 companies used technology during formal learning hours last year. (Elearning Magazine)
  • Revenue generation per employee is 26% higher for companies who employ training and development best practices through eLearning. (The Business Impact of Next-Generation eLearning)
  • eLearning can help companies boost productivity by 50%. Every $1 spent in eLearning results in $30 of productivity. (The Value of Training- IBM Report)
  • Companies that use online learning technology achieve an 18% boost in employee engagement. This way, as you increase job satisfaction and engagement among your employees, the overall health of your organization also improves. (Article: Reasons to Implement eLearning in Your Organization)


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Featured Whitepaper:

Building a Talent and Knowledge Management Program: The New Imperative for Procurement Organizations

Major changes in the procurement talent landscape have created a need for formalized talent and knowledge-management programs. Organizations must assess what evolving skills are needed and then attract and retain top talent by understanding their motivators. It is equally important to build effective processes to capture intellectual capital so that when shifts in workforce occur.

Read now >
Click here to subscribe to Denali Group whitepapers

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Recommended Webinar:

Embracing a Category Management Mindset: How to Think Like a Strategic Category Manager

Today’s Category Manager needs to have a wide-range of strategic capabilities. They are expected to be the general managers of their categories, the salespeople of procurement, and deep subject matter experts. Listen Now


Denali Academy e-Learning Modules

Click here to try a sample of Denali Academy’s eLearning Modules

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Continuing Education Hours

Denali Academy training is eligible for Continuing Education Hours (CEH) for any of ISM’s certification programs, such as CPSM or CPSD. It is also eligible to earn CPP points for the American Purchasing Society’s Certified Purchasing Professional program. Your certificate of completion can also count for 16 CEHs towards maintenance of your SPSM Certification from the Next Level Purchasing Association.

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Buzz About Denali Academy Training

“This training got our Procurement leadership team off to a great start. I hope that we’ll continue training across the category management base with a deeper cut into category management and strategic sourcing.”

Director, Strategic Sourcing

“I was given the option between signing up for Category Management Foundation and training from another provider. Based on the feedback from my colleagues who attended your training last year, I chose the Denali training.”

Category Manager
Automotive Industry