Acquisition and Life Cycle Management
How Does Life Cycle Management and Acquisition Impact an Organization?
While many managers may be unfamiliar with the terms “life cycle management,” “acquisition management,” or “acquisition life cycle management,” such tasks are more than likely a part of their day-to-day activities. In order to understand how life cycle management (LCM.) impacts your job, it’s helpful to have some background on this important topic.
LCM was developed to help businesses manage the total life cycle of their products and services. It is an incorporated concept that allows organizations to develop cost-effective and sustainable products and services, while practicing efficient disposal, purchasing and production procedures.
Regardless of the activity performed within an organization, it will have an impact in some way, shape or form. These impacts can hit the organization at a social, economic or environmental level. The problem is that, organizations that do not practice life cycle management may not realize the impact improper procedures can have to their bottom line. The impacts may not be obvious or immediate; instead, they may build over time. This is unfortunate, because when these types of issues erupt:
- The issue(s) more than likely could have been avoided
- It may take considerable time, effort and finances for the organization to recover
- It may be too late for the organization to ever recover
This is the reason why organizations look to outside companies to help them manage acquisitions and life cycles throughout the business process. It’s not just a job function; it becomes a way of corporate life.
Life Cycle Management – Why Is It Useful?
Life cycle management’s usefulness can be summed up in one word – efficiency. An efficiently run organization is profitable in more ways than just financially. For contract managers and supply chain managers who practice life cycle management in their acquisitions, it will help them with the following:
If you’re thinking of implementing acquisition and life cycle management procedures within your organization, you’d be wise to consider the best practices of companies such as ARAMARK, which provide LCM services for hospitals.
Case Study: ARAMARK Healthcare’s Acquisition and Life Cycle Management
Hospitals house thousands of pieces of equipment, which can be costly and time consuming for healthcare administrators to oversee. ARAMARK Healthcare provides acquisition and life cycle management services through proper planning:
- Reduce the cost of equipment ownership
- Provide procurement of equipment
- Manage finances, distribution and disposition of assets
ARAMARK’s acquisition and life cycle management procures and monitors hospital equipment, making certain all items are properly serviced and determining when each needs to be replaced. Not only does the acquisition and life cycle service ensure that every piece of hospital equipment is operating at peak performance it also reduces overall cost of ownership. Additionally, having an acquisition and life cycle management process helps free up healthcare administrators to focus on other facets of their job and not worry about equipment failure.
Put Proper Acquisition and Life Cycle Management Techniques to Work for You
A 2005 study performed by KPMG, focused on “how and why” organizations in Victoria, Australia used life cycle management and the results were not surprising. They revealed that businesses were less inclined to use a life cycle management process unless it would substantially improve their economic return and/or minimize costs.
If you are a manager seeking to implement acquisition and life cycle management strategies, the study offers several suggestions that you can use to persuade your organization to participate:
- Explain the LCM concept and how it applies to a corporate business strategy
- Focus more on the outcomes, rather than on specific input tools
- Encourage your organization to adopt LCM approaches where underlying (monetary) incentives for its adoption may already exist, but may not be apparent to your competition
- Emphasize how cost-effective tools and approaches can reduce operating expenses throughout your organization
Not only can smart acquisition and life cycle management practices save your organization money, but they can also translate to increased: profit, growth, employee education or philanthropy to name a few. A gain can certainly help an organization give back in a positive manner, which in turn can help it boost employee morale and public opinion. Everyone benefits.
It’s Not Just for Management
By no means is LCM a one-man or woman function. It’s a team game. Success is not possible unless everyone is on board. Many companies use a champion or trickledown process to promote the training and dissemination of LCM techniques throughout the organization. One or two senior managers will start the process and then train their staff, who in turn will train their co-workers.
Villanova University – Training Professionals to Help Their Organizations to Succeed
Organizations will almost immediately benefit if their contract managers, project managers, and other business leaders or anyone else in a leadership role, learn how to implement life cycle management techniques and better acquisition processes. By continuing your professional training with Villanova University, you will open the door to learning new skills and techniques such as LCM – which you can apply to almost any area of business you work in.
Founded in 1842, Villanova University is the worldwide leader in professional education online. A traditional, accredited university located in Villanova, Pennsylvania, it has more than 106,000 alumni, NCAA Division I athletic teams, unparalleled academic and technical support, and an outstanding faculty – over 90% of whom hold the highest degrees in their field. U.S. News & World Report has ranked Villanova the #1 Master’s University in the Northern Region for 20 years.
Interested in receiving more information about Villanova University’s contract management or project management certificate programs? Visit our Contact Us page and fill out a request form, or Call toll free 855-300-1473 and speak to a friendly program representative!