Spend Matters would like to welcome a guest post from Robert Rudzki.

In my last posting, I stressed the difference between a "budget-centric" approach (which constrains the results possible), and an "opportunity-centric" approach that optimizes the results achieved. What are the distinguishing factors between companies in these two categories?

In my experience, those procurement and SCM departments who invest time and effort to develop and master the skill of "speaking like a CEO/CFO" are the departments heading to the top of the profession. They are also most likely to enjoy a "no budget hassle" existence. On the other hand, those departments who don't -- or won't -- master this skill seem to be perpetually stuck on the tactical hamster wheel, and are continually playing a defensive game on staffing levels.

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Click here for Part 1 of this interview.

SM: What is the best way of "up-skilling" the profession? What role are groups like ISM, CIPs, etc. serving today? What could they be addressing that they're not?

Trent: I'm not convinced that some of the professional associations are "up-skilling" as much as continuing to focus on a set of operational/tactical/traditional topics. I would like to see some current data on the percentage of CPOs that don't have a procurement background. My anecdotal experience is that it is fairly high, which tells me that the procurement profession might be a bit short on the strategic leadership side. Many companies need to look outside the procurement group to find the kind of visionary and strategic leadership they need to create a next level supply organization. This is not something the professional associations are addressing well.

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Spend Matters recently had the chance to chat with regular contributor Robert Rudzki and co-author Bob Trent on their new book, Next Level Supply Management Excellence, now available for purchase.

Spend Matters: What gave you the idea for "Next Level Supply Management Excellence"? Aren't the basics still what most organizations need? And on that note, what percentage of companies in the Fortune 500 do you think are ready to prioritize some of the more advanced concept and techniques you talk about over the basics?

Rudzki: The initial idea came from discussions, and suggestions, from clients of my advisory firm (Greybeard Advisors) and also from some of my fellow CPOs. The suggestion that we look forward 10 or more years -- and envision what the "next level" of supply management excellence would look like -- came out of those discussions. In a sense, our original book, "Straight to the Bottom Line" is about the existing state of current best practices (and how to get there). "Next Level Supply Management Excellence" builds on that foundation and describes the emerging practices that lead to the next level of best practices and even higher performance. As books go, they are a natural one-two punch, even though each book is intended to be a standalone read.

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Spend Matters welcomes a guest piece from regular contributor Robert Rudzki.

Management guru C.K. Prahalad (who passed away in 2010) always told executives to think big. "Set ambitious goals and then figure out how to mobilize the resources to achieve them -- rather than the other way around. Most companies limit themselves because they focus primarily on what they believe they can afford." This phenomenon plays itself out during the annual budgeting process, and supply management is certainly not exempt in most companies. Consider the following three questions. Which one do you, as a leader, hear most often in your company?

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The latest from CAPS Research is a report titled "Focused Benchmarking: Reporting Cost Savings." 78 mostly-large organizations participated in the study -- it's a quick read, and worth a few minutes of your time.

When I sifted through the detail of responses to several of the questions, two noteworthy themes emerged:

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During a recent blogosphere debate about strategic sourcing, I offered six observations (see a previous post here). I want to elaborate on two of them today:

• Trying to introduce and embed strategic sourcing without the supporting pillars of a transformation roadmap is likely to generate only short-lived benefits
• Leading edge companies introduce strategic sourcing as one element of a comprehensive transformation roadmap. These companies are the ones most likely to be using true strategic sourcing (and other best practices) over an extended timeframe, yielding substantial and sustainable value

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In part one of this post, I noted that the word "strategic" is being regularly misused in the business world. An excerpt:

As it relates to supply management and procurement, "strategic" is being misused in at least two respects:

1. Form over Substance: Simply adding a few bells and whistles to conventional purchasing, and then slapping the word strategic onto the process or the department name, is not the same thing as adopting the process as it is intended. (This point is made strongly in the book "Straight to the Bottom Line®" by Rudzki, Smock, Katzorke and Stewart)

2. Dumbing Down the Process: Equally concerning, are the companies that at one time employed a genuine strategic sourcing process, but have "dumbed down" their process to be a nonstrategic, tactical ghost of what it used to be.

The second situation described above may in some cases be due to the temptation of quick wins described in my last posting, and in other cases due to a change of leadership and/or losing sight of the value of staying strategic.

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In one sense, you can never devote too much time and attention to your professional development. On the other hand, since most of us have overcommitted schedules, it is important to prioritize and be selective with your professional development plans.

An offering worth your attention is the Professional Development Seminar Series offered by the Center for Value Chain Research (CVCR) at Lehigh University. These live, in-person seminars address topics that are relevant to today's managers and executives.

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There are a lot of popular buzzwords in the business world. Some have a fleeting 15 minutes of fame while others seem to endure forever as overused or misused terms. "Strategic" is perhaps one of the most overused (and misused) terms in business today -- enjoying that status for quite some time. As it relates to supply management and procurement, "strategic" is being misused in at least two respects:

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