A Waste Of Time Or A Gold Mine? Why You Need To Classify Your Spend Data ASAP

Classifying your spend data? A big waste of time, surely … or a crucial step that needs to be taken without delay? The Classification Guru Susan Walsh explains why this needs to happen immediately.


So, picture the scene: it’s budget time and as far as you can see everything is under control, the bottom-line balances out, you’re in the black and life is good. But, are you really getting the full picture? You’ll never know unless you accurately classify your spend data.

You may already be thinking about it; or can’t justify the time or resources; or it might be something that you think is just a complete waste of time or money. Let me tell you why it isn’t, and you should have your spend data classified as soon as possible…

First things first, there’s that full picture I mentioned. If you’re only using your General Ledger codes, I can guarantee that they are wrong! Now, I know that’s a bold claim, but it is based on years of experience of working with GL codes. More often than not they’re used by people who don’t necessarily understand or know what they’re logging or the importance of accuracy. The result? Items logged under random GL codes.

Now, have a think about your department budgets: Karen in marketing’s maxed hers out, but she’s just placed an order for 5000 new leaflets to be printed. How? In my experience, it’s been snuck into someone else’s budget. Think about marketing and sales, would an order for 5000 leaflets really look out of place in a sales budget? Probably not, unless you look a bit closer. And this means you’re not really getting a true picture of what’s going on at ground level or what you might need for specific areas of your business. You can’t increase the marketing budget if you don’t know they’re spending it all.

We also, unfortunately, need to mention the possibility of fraud or embezzlement. It’s not pleasant to talk about and no one wants to think the worst of their staff or suppliers, but it can and does happen. Someone may have tried to mislead or take advantage of you in some way and if the spend data is messy or they’ve been clever it can be very difficult to spot. This is why it is also a very good idea to have an external party look over it, because then nobody has a vested interest in hiding what’s in the data – they’re just classifying it!

Now, I’m not saying it is a quick and simple process, good classification can take weeks and weeks … and weeks! But it’s worth the wait when you get back your brand new, shiny data set with all this new and organised information. Then you’ll probably say to me, what do I do with this now?

Well, the first thing you do is actually look at what you really spend your money on and find out if you could or should be negotiating better rates with your suppliers because the data’s shown you’re actually spending a lot more than you thought you were or have been automatically accepting price increase when there’s much better deals out there!

Then once you’ve done that, you’ll probably want to review your processes because, as I said before, I can almost guarantee something will have been flagged up during the classification process which indicates spend isn’t being accurately logged.

Ultimately, it’s all about saving you money and that’s no bad thing for anybody. Now, more than ever, it is so important you know where your businesses’ money is being spent and I am sure every single person who has their spend data classified will find at least one hidden surprise – like a data Kinder Egg! (Sorry my American friends, they’re not banned in the UK!)

So, although you may be put off by the upfront cost of having your spend data classified, it will save you money in the long run and the benefits to your business are pretty massive.

Susan Walsh is the founder of The Classification Guru, a specialist in spend data classification, supplier normalisation and taxonomies.  You can contact her at [email protected] https://www.procurious.com/professionals/susan-walsh

3 Key Differences Between CIPS & ISM Certification – But Why It Doesn’t Matter!

When it comes to professional accreditation for procurement and supply chain, there are several options available. But, as it turns out, all are equally good for your professional development.


Unlike other professions, procurement and supply chain does not have one, single governing professional body. While this does make things slightly more complicated, it does provide professionals with a greater degree of choice when it comes to their professional accreditation journey.

Individual decisions may be based on geography, field of procurement, or even previous and current job roles. And while people will make different choices, it does not mean that any of these options are better than the other or will hinder career progression in the long-term.

Previous articles on Procurious on professional accreditation have focused largely on CIPS and the MCIPS/FCIPS qualifications. However, in order to provide a broader view on available accreditation, we need to look at other institutions like the Institute of Supply Management (ISM), and their widely-recognised Certified Professional in Supply Management (CPSM) qualification.

To understand which qualification is better suited to you as an individual, we need to look at the key differences in the organisations and accreditation, and how your decision may impact your future career.

1. Geographical

The main difference between the two organisations is a geographical one.

CIPS is headquartered in the UK and has a very strong network in its home country. It has also developed strong network bases in EMEA and Australasia, with each region having its own management structure, as well as a strong presence in Africa and East Asia. It is a truly global Institute, with over 200,000 members worldwide.

ISM was founded in North America in 1915 and has consolidated its base in this region. It doesn’t have the same global branch network as CIPS, with its networking predominantly focused in the USA. But it is starting to spread its network worldwide, including an increasing membership throughout Latin America, with over 50,000 members from 100 countries.

2. Time & Study Format

When it comes to qualifications, it’s hard to split the two bodies. Both take procurement and supply professionals from student or entry-level members and provide learning, development and examination in order to progress to accreditation. The time taken to achieve the qualification and the method of study are slightly different, however.

CIPS’ key accreditation is MCIPS, with the opportunity to become a Fellow (FCIPS) of the Institute beyond this. Depending on the starting level, experience and nature of study, accreditation can take anywhere between 3 and 6 years to complete. Learning materials and exams are all available digitally, though study can be undertaken in person where available.

CIPS also provides the opportunity to gain MCIPS via an accredited degree, a Management Entry Route or Corporate Award, all of which reduce the requirement for CIPS exams themselves.

The ISM Certified Professional in Supply Management (CPSM) qualification generally takes between 6 and 12 months to complete, depending on the method of study, time and experience. The Institute offers both self-study and classroom-based learning, but the only way to gain the qualification is to go through the three CPSM exams and have the required level of experience in procurement.

Currently there is no option to use other qualifications (degree, post-graduate degree, etc.) to provide an exemption for exams.

3. ‘License to Practice’

Possibly the biggest difference in the accreditation offered between the CIPS and ISM is what is offered beyond the main qualifications.

For ISM, this is the ISM Mastery Model. The model is based around a set of 16 core competencies and more than 70 sub-competencies which are seen as critical for a successful career in procurement and supply. Further learning resources help take individuals and teams from the first level, ‘Fundamental’, right up to ‘Mastery’, helping to provide a level of standardisation in skills for the profession.

Where CIPS differentiates from ISM is in its chartership programme. CIPS’ ambition with this when it launched its chartership programme was to create a ‘license to practice’, similar to other professions. With procurement looking to achieve the same recognition as these other professions, chartership seems like something that many people may consider going forward.

So which is better?

In some areas the differences between the organisations and their respective qualifications are stark, in others they are slight. Despite these differences, it doesn’t mean that one qualification is better than the other, or that there is more positive benefit for long-term career prospects in being a member of one institution over the other.

This is because of the key thing that both have in common: international recognition as a gold standard accreditation for procurement and supply chain. CIPS and ISM have together raised the bar for procurement, providing standardisation in learning, development and qualifications, and applicable to all areas, industries, sectors and individuals involved in the profession.

Irrespective of which route you choose, by choosing to undertake professional development and further qualifications, you’re playing your part in advancing the procurement profession. The best thing you can do is look at the organisation and qualification that suits you best and go for that. If everyone takes this step, then procurement will be the ultimate winner!

LEAD LIKE A BOSS: MASTER GLOBAL SUPPLY CHAIN SHIFTS

In light of COVID-19, is the status quo still the best way, or is it time to move away from Globalisaton to embrace Localisation and its benefits? Tania Seary explains what such a gargantuan shift would entail and how you can master it.


The supply chain strategy paradigms we have held close and true for decades are being challenged. The questions are complex, important, urgent and without easy answers.

Consider some of the traditional supply chain paradigms such as lean manufacturing, just-in-time inventory management and extended payment terms. In light of COVID-19, is the status quo still the right way to operate? Take supplier payment terms, for example. Maximising working capital has been a top priority for as long as we can remember. Now, given the rise in bankruptcies and the clear connection between supplier viability and business continuity, many procurement leaders are taking a step back and thinking more about their suppliers’ cash flow in addition to their own.

These paradigm shifts are substantial but pale in comparison to the potential changes around supply chain globalisation.

Supply Chain Globalisation: Is It Time to Localise?

For decades, supply chain strategies have revolved around moving production and sourcing to low-cost geographies. This traditional low-cost sourcing mindset affects everything from lead times, supplier selection, production, quality, margins and more.

Today, leaders everywhere are asking if their heavy reliance on global suppliers is less strategic and more of a risk. When Procurious asked more than 600 procurement and supply chain professionals where COVID-19 had the biggest impact, 21% said logistics and transportation slowdowns or delays. Over one in four cited lack of available supply due to production downtimes and shutdowns. Ninety-seven percent said they were impacted in some capacity.

Pressure and attention are heightened when disruptions cause shortages to critical supplies such as ventilators or personal protective equipment, direct materials and popular merchandise. Beyond the headlines, there’s also a significant impact to the services supply chain. When critical outsourced services, including customer support, security and IT, were suddenly forced to go remote, we saw a corresponding rise in risks related to quality, fraud and compliance.

When a supply chain disruption occurs, it is impossible to control what is happening, especially when the product or service you rely on is thousands of miles away and completely inaccessible. What business leaders can control, however, is from where they source. That explains why over one-third of the profession is currently planning to either expand their supply base or shrink their global supply chain and depend more upon local suppliers.

The idea of realigning supply chains is not new. Questions about globalisation and the heavy reliance on China have been bubbling for years. Macro and geo-political events such as the China-U.S. trade war and Brexit brought the topic to the surface. COVID-19 caused it to boil over. Forbes even went as far as to say COVID-19 will become the final curtain on China’s nearly 20-year role as the world’s leading manufacturer.

Our research shows that over half of supply chain and procurement professionals believe Fortune 500 companies should reduce globalisation by localising supply chains and bringing manufacturing back home. But as most industry veterans recognise, that shift is far easier said than done.

The Catch-22 for Supply Chain & Procurement

Surprisingly, 27% of executives plan to stay the course and not make any meaningful post-pandemic strategy shifts. Many of them probably want to alter approaches, but recognize the inherent complexities and costs associated with doing so.

Understandably, most executives have never before experienced a supply chain disruption to this extent. While localisation seems like an appealing strategy to minimise future risks and boost the local economy, it’s far from a quick and easy fix. The obstacles are plenty.

Overcoming the deep reliance on low-cost sourcing is the first challenge. The second is production complexity. Technology gets more innovative, personalised and sophisticated by the day. It would be nearly impossible for a single manufacturer to hold all the technical capabilities and expertise to produce these products 100% in-house. To keep up, manufacturers outsource critical components to others, who outsource to sub-suppliers and so on.

Breaking this chain, while simultaneously bringing production closer to home and swaying the board to accept lower margins, will require executives and procurement teams to perform in a new reality.

Of course, there are clear benefits of going local. The end-to-end supply chain impact on carbon emissions is more than five times that of companies’ direct operations. Localisation optimises and shortens the supply chain network, lowering emissions.

In addition, sustainability performance is proven to impact the bottom-line. According to the World Economic Forum, sustainable procurement practices can reduce supply chain costs by 9 – 16%. On a larger scale, shifts toward localisation strengthen national and local economies, support the job market and, in many cases, reduce enterprise risk.

What’s to Come?

The decision to move production requires long-term planning and commitment. It won’t and can’t happen overnight.

Companies planning to make seismic strategy shifts like localisation require proper technology investments. Over 90% of companies are already using at least one Industry 4.0 technology, including blockchain, artificial intelligence, internet of things and more. While adoption of blockchain is still relatively low, the network promises to play a pivotal role in whatever changes come next.

The following 6 – 12 months will be crucial for every company and require a great amount of flexibility and adaptability. It’s impossible to predict (with 100% accuracy, at least) what’s next. Anyone that tells you differently is out of their mind. My advice to C-suites and supply chain and procurement leaders is to remain agile, invest, lean on your peers and prepare for anything.

Is Your Contract Rollout Turning Into A Psychodrama?

The critical moment between signing a contract and handing it over to the business seems like the perfect time to take the hands off the wheel and celebrate. But don’t pop that champagne just yet – this is a time for procurement pro’s to shine! Ensure you remain front and center for the contract roll out and implementation to make sure you deliver the value identified during the sourcing process!


You’ve gone through the pain of a long, drawn out sourcing and negotiation process. You’re exhausted. The business agrees that you’ve selected the right supplier to award the business to. After all, they signed off on the decision…right???  Oh no. The ink isn’t even dry on the contract when the backstabbing and psychodrama begins!

5 contract implementation pitfalls

Read on to find out the top 5 reasons contract implementations go wrong and what you can do to get it back on track.  

1. Lost your true north

The supplier is delivering the services in accordance with the new contract, but the reactions seem mixed.  Some people are happy and some people are not. Key stakeholders are offering completely different views of how successful this project implementation has been.

  • Pitfall: The problem definition or opportunity statement was not correctly nailed down. 
  • Resolution: Facilitate a group meeting about the purpose and scope of the contract. Reset expectations about what the supplier has been contracted to provide. You may be able to get the supplier to make minor adjustments to appease some of the requests.
  • Tip: Ensure the focus is on resetting stakeholders back to the shared outcome and not individual desires or opinions.

2. People don’t like change, get in front of this

New people have come out of the woodwork that suddenly have an opinion about how things should have been structured or worse – who you should have chosen and they’re kicking up a fuss. Drama!

  • Pitfall: The wrong people were involved or the right people weren’t in the room.
  • Resolution: Most big project changes or contracts need a reference group or project team to help the implementation phase bed in for the first 6 months to a year. Offer to bring these people into the project team and get them involved with future reviews. It’s hard to complain if you’re part of the group….right? 
  • Tip: Make sure there is a solid communications and change management plan taking people along the journey and communicating the major project steps. Try to think of ways to involve end users to gain maximum chances of buy in e.g. trialing new furniture for a fit out project or sampling coffee for a new catering contract.

3. You specified the how

Things aren’t quite right and you can’t really put your finger on it. Things aren’t happening like you planned. The issues aren’t disappearing. Your managers aren’t as wowed as they were expecting and they’re starting to ask questions.

  • Pitfall: You got what you asked for and that’s the problem. Buyers can sometimes feel the need to define not only what they need, but also how the supplier should solve this problem.
  • Resolution: The market will respond to what you put out, so be careful what you ask for. Leave as much room as possible for suppliers to make their mark and do what they do best, which is to know their stuff and their industry. Ensure you leave room for creative solutions, suitable alternatives and innovation.
  • Tip: If you’re trying to solve a problem have you nailed down the right root issue? Try the five whys concept to ensure you buy what you really need

4. Contract Management, what’s that?

The project team disappear once the contract is signed, they high five each other as they head back to their day jobs and slap the documentation on the contract manager’s desk. You check in one month later and the contract isn’t working – complaints are rolling in from all fronts.

  • Pitfall: Often the time investment of managing a contract particularly at the mobilisation phase is not properly scoped out and/or other priorities creep in. 
  • Resolution: Ensure the project team sticks around for the all important start-up and that the contract manager is in the sourcing project from the beginning. You’d be surprised how often this simple action is not undertaken.
  • Tip: Keep the regular project meetings for the first three months of the contract. Ensure you try to realistically gauge how much time this contract will take to manage and get the right cover.

5. Different supplier but same result, what happened?

This contract was meant to deliver real changes, but a year or two in, it’s just the same service and results the last supplier gave. What happened to the agreement of innovation, ideas, incentives for high KPI scores and phase 2 of implementing a new system?

  • Pitfall: There are a few things that could be going on here: either the process asked for a whole lot of things the buyer wasn’t ready for, or didn’t have the commercial readiness to be able to realistically achieve; The supplier hasn’t been managed or given any clear direction; Protracted contract negotiations stifled innovation, goodwill and squeezed margins.
  • Resolution: Time for an honest 360 feedback meeting. Be clear on what you want and what you are able to achieve.
  • Tip: It’s great to have thirst and hunger to do things differently, but be careful not to over scope what you need or what the organisation is ready for. If you aren’t going to portion risk evenly then don’t enter into a pain / gain share model (for example).

Next time you’re part of a large project team or leading a procurement process that will result in a new supplier, make sure you think ahead and mitigate these potential pitfalls to ensure your next contract implementation ain’t no drama llama.

How To Keep Your Career On Track During A Recession

With the world economy in such a state, layoffs, redundancies and furloughs are commonplace – but even so, you can appear indispensable to your organisation.


There’s no denying that this year has been a year that will be remembered, and definitely not for the right reasons. Many of us know of, or personally know, someone who has lost their job, which is unsurprisingly given that more people have lost their jobs this year than during the Great Depression. Fortunately, many of us in procurement and supply chain have been protected thus far, but we do not know for how long. So is there anything we can do to ensure we keep our career on track and avoid being laid off? 

When you work for large corporations as many of us do, it can be easy to feel powerless against a potential redundancy. But rest assured, there are a few significant things you can do to keep your career (and your job). Here’s what you can do to keep afloat when everyone else seems to be on the sinking ship: 

1. Be visible

In a perfect world, you would be judged on your work and your work alone. But career success requires so much more than that: to learn and grow, you’re also expected to volunteer for extra projects and committees, network, pursue development opportunities, and so much more. 

Doing so makes you more ‘visible’ to more people, but it also makes your effort far more visible. And ultimately, if more people value you and your input, it’s more likely that if the time comes to lay people off, your job will be seen as essential. 

Of course, visibility has taken on a whole new meaning this year. You may not be able to show up in person anymore, but if you’re looking to keep your career on track, volunteer for that committee you might have skipped in the past. Be as engaged as possible, even when meetings bore you. And make time to connect with colleagues, even if it’s just for a quick social video chat. 

Work is not a popularity contest, but the more connections you have, the more likely you will be to stay. 

2. Be optimistic 

Being optimistic in this environment is challenging at best, impossible at most. And why should you bother? It’s doom and gloom for most of the world for the foreseeable future, with no real end date. 

Could optimism actually help your career, though? Science says yes. 

Research into who survives massive layoffs shows some surprising results. In a nutshell, being optimistic at work is important for one key reason: people will be more likely to want to work with you. In business, people are almost twice as likely to want to work with someone they consider congenial, over someone who is more capable, yet less likeable. 

When a company is considering layoffs, they will consider how much work each individual or department needs to do. If you’re optimistic and great to work with, you’ll likely get the lion’s share, and will be less likely to be able to be replaced. 

3. Support your leader

When times get tough, it’s tempting to make an enemy out of your boss. After all, they often have a say on whether or not you’ll keep your job, and sometimes are in the terrible position of having to deliver you the bad news – while keeping their own job, which can feel crushingly unfair. 

Yet if you’re looking to keep your career on track during a recession, going dark on your boss is not advised. 

Managers, just like everyone else, suffer through recessions and not many (if any) enjoy laying people off. Recognising this, and showing empathy for them, can help create an important emotional bond. In turn, this bond will help them see you as mature and resilient, and hopefully, all things being equal, an asset to the company, and one that is not easily replaced.  

Keeping your career on track in this economy is certainly a challenge, and sometimes you simply go into survival mode. But remember, you’re not powerless. There are things you can do every day to show how invaluable you are to your company, so next year – hopefully – you can not just survive, but thrive. 

Make Sure Your Data Has Its COAT

Dirty data can be costly – but accurate data is always a great investment. Make sure your data has its COAT and you’ll never be out in the cold, writes Susan Walsh


If your data doesn’t have a COAT, there could be a range of bad or costly decisions made which could affect the business performance, financial situation, risk jobs, or even the fate of the company.  You wouldn’t go out in freezing temperatures without the appropriate coat and you shouldn’t work with data or make business decisions without the same level of protection – accurate data.

And, just like with coats, there are different levels of quality data services out there. If you buy a cheap jacket, it might not be waterproof or protect you from the elements, it won’t last much longer than one season and you’ll need to buy another the next time winter rolls around again. It’s the same with data – if you don’t invest in good quality service you will end up paying twice as much, if not more, in the long run to fix the earlier mistakes. Don’t be left out in the cold.

So, what is COAT?

Consistent

Generally data is used by many people or teams, which can lead to multiple classifications of one product. For example, one person might put DHL as a ‘courier’, while another might log it as ‘logistics’ or ‘warehousing’.  A taxi might be classified generically as ‘travel’ when it should be classed as ‘Travel > Road Transport > Taxis’ and a project cost should be assigned to the same budget or GL code, not several.  Or it could even be a simple as units of measurement. One person may use ‘Litre’, another ‘Ltr’ and another ‘L’ – but these should all be one format.  This means everything can be reported accurately, you get a true picture of what’s going on and better business decisions can be made.

Organised

Data is only useful if it’s organised.  Think of a messy closet: you’re looking for your favourite top but can’t find it as everything has been thrown in there.  And, much like your closest, you can organise your data in different ways, depending on what you want to get out of it and that will produce different reports/analytics.  You may want to assign data to employees, teams, departments, functions or internal categories, as well as time periods such as months and quarters, or year groups like P1, P2 etc… So, for example, when you need the information on the accounts that Sharon in Finance is working on, or the sales teams’ performance for the quarter – you can pull that information quickly.

Accurate

This can mean different things to different people. At its most basic level, accurate data is correct.  In more detail, this could be no duplicate information; correct invoice descriptions; correct classifications; no missing product codes; standard units of measure (e.g. ltr, l, litres); no currency issues; correctly spelled vendors; fully classified data; or the right data in the right columns.

So, what does this mean?  It means greater visibility across your business in several areas, allowing better decisions, as well as time and cost savings and increased profits.

Trustworthy

This is critical.  Business decisions around jobs, staffing, budgets, cost savings and more are all based on data.  Data is used by everyone from the bottom to the top of an organisation. You have to be able to trust that what you’re looking at is the right information, and you need it to be accurate in order for your teams to use the data in their daily jobs. 

If they don’t trust the data, then they might not use the fancy new expensive software you’ve just spent tens of thousands installing.  Or the new AI you’ve installed may not produce the right results because it’s learning from dirty data.

Like a good coat, data is an investment – not a cost.  By making sure it has its COAT on, you’re saving time, money and avoiding future problems.  And also like any coat, it needs to be maintained.  You need to continually ensure your data is consistent, organised, accurate and trustworthy to get the most out of it.

Have you ever experienced a make or break moment at the hands of your data? Let us know in the comments below!

How To Get The Most Out Of The Big Ideas Summit This Year

It’s the digital event of the year that everyone’s been talking about and recommending – so how do you make the most of it? Here’s 7 ways you can maximise every avenue of opportunity the Big Ideas Summit has in store.


You all know what we’re talking about when we describe this. You registered for the biggest procurement event of the year; the one that every industry expert out there says you simply can’t miss. You’re determined to get the most out of it.

But it’s virtual. Your day is still packed with meetings. You plan to login from home (with all the distractions that come with it.) And your to-do list is a hundred items long.

You’re afraid that this crucial professional development opportunity might pass you by … But not this year. You deserve this opportunity – and want to make the most of it.

For anyone out there who has ever felt a little intimidated by events, this year’s online Big Ideas Summit will provide you with unparalleled (and many would say, easier!) opportunities to learn, grow and network. But it will also be different.

Over 1,100 of your peers have signed up alongside you. We have an action-packed agenda including sessions on  how to think the unthinkable, understand the new risk landscape, protect your career and much more. 

To get the most out of the event, you need to prepare. But don’t worry, the prep is quick and easy.

Here’s how to get the most out of Big Ideas 2020:  

1. Register for the Event

Once you’ve registered (if you haven’t, do so here), you’ll receive an email inviting you to the Event Hub. To accept this invitation, you’ll need to click on the link and enter your first and last name, and email address you registered with. You’ll then receive an event code, which you can use to enter the event (note that this code is only valid for 24 hours).

2. Block off your calendar

Let your team, boss, family and internal stakeholders know what you’re up to. The best way to benefit from the conference is to give it your time and attention.

3. Explore  the Event Hub

You’ll find all of our great sessions in the Event Hub. Each session has its own unique link, and when you click it, it will open a new viewing screen on your browser (or phone/tablet etc.). Take time to review the sessions in advance to ensure you don’t miss the one you most want to attend. 

4. Partner networking

Within the Event Hub, there are also Partner Virtual booths. These information-rich booths enable you to network and get to know our partners (online!)
Simply click the booths to enter. 

5. Live networking sessions

There are 2 live 20-minute facilitated networking sessions, to cover all of your networking needs.

6. Share ideas and ask questions

Have you ever had a burning question during a presentation, only to have forgotten it by the time the session ended? Cue another benefit of a digital event! This year, you’ll be able to comment on each session while it’s happening, so you never forget a question or forgo an opportunity to have your say. 

7. Bring it home

Okay, this is more of a post-event action. Take notes, share ideas and make a concrete plan to bring your learnings back home.

And as always, we’ll be with you every step of the way. If at any point you need any help, reach out to [email protected]

This year, we need more Big Ideas more than ever. We can’t wait to see all of your virtual smiling faces and help you dream big.

Getting Your SOW Right The First Time

The Statement of Work (SOW) is the heart of any contract – so ensure you get it right the first time, thanks to this expert guide by Lawrence Kane, COP-GOV, CSP, CSMP, CIAP


The Statement of Work (SOW) is the heart of your contract. It defines requirements and success factors for your supplier, describing what services, tasks, and/or resources must be delivered along with metrics that govern whether or not those obligations have been met successfully (such as acceptance criteria, Service Level Agreements, and the like).

It is costly to change a SOW once set in place not only because your negotiating leverage is reduced after contract signing but also because any modifications can drive operational, financial, legal, and reputational risks for both parties. Unfortunately unresolved disputes harm the relationship and may even end up in court, so it is imperative to get your SOW right the first time.

A quality SOW will be distinctive for each type of contracting relationship (such as supplemental staffing, managed services, outsourcing, or Vested outsourcing) and will vary substantially depending on the type of work acquired (such as labor, hardware, software, services, etc.). The document itself tends to have some background information that levels the playing field for non-incumbents during the bid process along with your requirements for such things as request fulfilment, governance, implementation, transition, innovation, transformation, technology, operations, knowledge management, business continuity, incident management, security, performance management, information protection, change management, etc.

All SOWs should be aligned with your sourcing strategy so that you’re buying the right things (and retaining the appropriate functions). SLAs and other metrics must be reasoned, reasonable, and achievable so that you’re paying for a solution that meets your business need without costly over- or under-engineering.

Since the people who negotiate the deal often change roles and/or companies before the contract expires or is terminated it is important that the original intent is clear regardless of who reads the document. That means using clear, unambiguous language and enforceable terminology.

Choose your verbs carefully. “Shall” is a requirement the supplier must follow whereas “will” shows intent, “may” is optional, and “expect” is aspirational. I may expect to win the lottery, for instance, but that’s unlikely to happen unless I buy a ticket and probably not even then… As you can see, grammar matters in contracts. To reinforce that point, there’s a huge difference between the following three sentences:

  • Lets eat grandma.
  • Let’s eat, grandma.
  • “Let’s eat,” Grandma.

To delve a little deeper, proven practices vary with the type work you need to buy. The following are some tips for assuring first time quality when writing your SOW for supplemental staffing, managed services, outsourcing, and Vested outsourcing deals:

Supplemental Staffing is used to acquire qualified workforce from a supplier. This is “pay-for-effort” work, so onboarding and off-boarding processes must be predetermined and followed, and integration with retained efforts well thought out. For supplemental staffing SOWs:

  • Focus on job descriptions and daily management
  • Normalise requirements with industry benchmarks, describing any certifications or bona fide occupational qualifications necessary
  • Include badging, background checks, and other vetting requirements and processes that help assure the supplier employees will be capable, competent, and appropriate
  • Clearly specify any non-labor elements provided by both parties (supplier and buyer)
  • Describe how and where the work will be performed, establishing governance for daily management

Managed Services contracts are used to put a performance agreement in place with a supplier. This is “pay-for-unit-of-service” work, so clarity in service obligations and performance levels is essential. For managed services SOWs:

  • Focus on transactions, business rules, measurable objectives, and acceptance criteria
  • Levy only minimal requirements for interoperability or security to the extent feasible so that your supplier can do what they’re best at (which is why you hired them after all)
  • Specify any export controls, legal, security, or badging requirements that apply to supplier’s on- or offsite personnel
  • Describe the “what,” and also the “how” where necessary
  • Develop clearly defined and measurable outcomes (but not too many) to set SLAs and other key metrics
  • Optimize cost/service trade-offs
  • Establish governance for oversight

Outsourcing is a long term, results-oriented business relationship with a supplier. This is “pay-for-result” work, so deliverables must be closely aligned with business needs. For outsourcing SOWs:

  • Focus on business outcomes and most significant service levels
  • Facilitate supplier’s ability to do what they’re best at by not over-prescribing obligations, levying only minimal requirements for interoperability or security
  • Specify any export controls, legal, security, or badging requirements that apply to supplier’s on- or offsite personnel
  • Describe outcomes, not transactions, focusing on the “what,” not the “how”
  • Identify inputs, outputs, and interfaces, and develop clearly defined and measurable service levels (but not too many) to set SLAs
  • Optimize cost/service trade-offs
  • Establish governance for insight more than oversight

Vested Outsourcing is a long term business relationship with jointly designed solutions to a business imperative. This is “pay-for-outcome (solution)” work, so innovation is mandatory. For Vested outsourcing SOWs:

  • Must be linked to a shared vision (often outlined in a statement of objectives instead of a traditional SOW)
  • Focus on innovative solutions to your business imperatives
  • Requires extensive “open-book” collaboration to design an affordable solution that simultaneously meets both buyer’s business needs and supplier’s objectives
  • Solution taxonomy includes processes managed by both parties to show an end-to-end view
  • Uses flexible Statements of Objectives rather than a traditional SOW and architect the details together
  • Guard against constraining the scope too tightly, allowing supplier to accept all work scope (and risks) that are not core to the buyer’s business
  • Develop clearly defined and measurable outcomes, focusing on the “what,” not the “how”
  • Establish a governance for joint insight, not oversight

It can take 4 to 6 months to write a quality SOW (and associated SLAs and other key metrics), but the end result is worth it. For example, the US Air Force saved 50% by specifying that their floors must be clean, free of scuff marks and dirt, and have a uniformly glossy finish, rather than requiring that their contractor strip and re-wax their floors weekly. Seems obvious, perhaps, but this simple example shows why good, clear requirements matter.

Putting it into action… Let’s pretend, for a moment, that you are a busy professional and need someone to cut your lawn rather than doing it yourself. Here are three possible ways of writing the SOW to buy a lawn-cutting service:

  • bad SOW would be,
    “Cut my grass.”
  • better SOW would be,
    “Supplier shall cut my grass to a height of 1” and trim along the walkways once a week between the hours of 10:00 AM and 6:00 PM local time.”
  • The best SOW would be,
    “Supplier shall provide care and maintenance for the lawn at [address], including all fertilization, weeding, trimming, edging, thatching, and debris removal necessary to keep it healthy per American Lawn Care Industry organic lawn care standards. Supplier shall assure that the height of the lawn remains between 1” and 2” at all times, there are no bare patches, and that it does not overlap curbs or walkways or spread into flowerbeds. Supplier shall perform all work that creates noise levels over 100 decibels between the hours of 10:00 AM and 6:00 PM local time. All Supplier employees shall pass a criminal background check and conform to OSHA safety standards while on the job site. Supplier shall provide all tools, equipment, and ingredients necessary to perform the work. Buyer will provide water, power, garden hose, and sprinklers.”

It takes time and effort to get it right, but the better the SOW you write the more likely you are to receive all the value you expect when engaging with a supplier. Ultimately an investment in first time quality leads to a better, more affordable outcome.

This article was originally published on LinkedIn and is reproduced here with kind permission.

5 Ways to Use Your CIPS Membership to Keep Your Job

During times of uncertainty, you need to make yourself stand out to help you keep your job. This is where your CIPS membership is worth its weight in gold.


If you are one of the over 200,000 procurement professionals globally with a CIPS membership, the chances are high that you are studying, or have studied, towards your MCIPS qualification. You may even have started your chartership journey through Continuous Professional Development (CPD). As said previously, there are great benefits available to those who are lucky enough to be in this position.

There will come a time in your career where holding these qualifications will prove even more valuable than before. In times of uncertainty, either globally or even just for your organisation, belts will be tightened, and headcounts will be reduced.

And your FCIPS, MCIPS and/or Chartership could be the means by which you weather the storm.

Can qualifications help me keep my job?

As procurement and supply chain follow other professions down the route of chartership, qualifications will increasingly be sought and expected by employers and CPOs. There is an expectation in role development that procurement professionals will have, or at very least be studying towards, these qualifications.

Leaders of the profession both expect and are expected to have MCIPS and will look to build teams in this image. When it comes to times of turmoil, not having qualifications may result in you being the one without a chair when the music stops.

How, then, can the time and effort put into your exams and CPD help you be the one to hold on to your job? Here are our five top reasons.

1. A willingness to learn

When it comes to your qualifications and job, it’s not enough to settle with what you have and where you are. Your CIPS membership and CPD show your organisation that you are invested in your career and have a keenness to better yourself and keep working.

Your willingness to put in extra time and effort to earn and keep these qualifications is not only a benefit to you, but to your organisation too. Not only that, but self-study and CPD show you can direct yourself independently, something that will be noticed by your managers and may be important when it comes to that next round of promotions or cuts.

2. Up to date knowledge and training

Earning your qualifications based on specific exam-based knowledge is one thing, but subsequently keeping that knowledge up to date is something else entirely. Your CIPS membership, complete with its numerous sources of information and learning, is a great way to ensure that your knowledge is always on point.

You will continue to learn new skills, and understand key industry trends and requirements in the wider procurement profession. You can then bring this new knowledge and concepts back to your organisation, helping to keep it up to date, and potentially even providing it with a competitive advantage.

3. Show yourself as a committed professional

Organisations continue to recognise the importance of professional qualifications, CPD and networking for their procurement teams. For those who are wanting to undertake further studies, organisations are increasingly aiding this by choosing to invest in their employees’ studies.

However, beyond the monetary investment, organisations will recognise your commitment to them and procurement as a career by choosing to further your studies. Those people who don’t go down this route may not be seen as committed in the same way, which could count against them in the future.

4. Part of a community and network

An important part of expanding our own sphere of knowledge is networking with peers and collaborating in procurement-led, highly interactive communities, like CIPS and Procurious. Information from textbooks can help provide a foundation, but the real benefit to you and your organisation comes from understanding what has been successful in the real world.

With a global membership of over 200,000 procurement and supply chain professionals, the CIPS network is a cornucopia of ideas and knowledge. Being an active part in this network means you bring your learning, as well as ideas from others, into your organisation, increasing your value and future potential.

5. A strong future prospect

A willingness to learn and then keep that learning up to date. Commitment to your chosen profession and your organisation. A wealth of knowledge and experience at your fingertips. On top of this all, professional membership and qualifications. Having some of this will help your career; having all of it will mark you out as a strong future prospect in any organisation.

Your qualifications will open up new routes and job roles and ultimately make you a better candidate for promotion, rather than a candidate for headcount reduction.

While there are no guarantees that your CIPS membership will mean you keep your job, it provides a compelling case as to why it’s in the interests of your organisation to hold on to you and support your studies. With most organisations asking for MCIPS for new roles and recruitment, you would question why you wouldn’t study towards it given the opportunity. It’s the start of the journey to a long, and hopefully prosperous, career in procurement.

Three Reasons Why Procurement Has A Beautiful Future

Why should you be excited about procurement’s future? Three experts weigh in as we close out 2020 and look forward to a new year.


Now is the perfect time to be in procurement.

Think about it – when have we ever enjoyed so much trust, influence, and freedom to make changes?

We asked three experts why they’re excited about procurement’s future.

We can protect our companies 

Procurement is finally shedding its image as a support function. Now the c-suite is learning how much strategic value we can add.

Just ask Dr. Jonnie Penn, an artificial intelligence expert at the University of Cambridge and keynote speaker at the 2020 Big Ideas Summit.

He says the last 40 years of supply chain management were characterised by a push for efficiency.

“We see now that that’s too fragile a metric amid deglobalisation,” Penn says. 

“You need to start to incorporate other measures that give you security in the resilience of your system. 

“In the past you might have made a push for weekly or monthly planning. We’re now looking at a shift to continuous planning.” 

That puts supply chain management forward strategic leaders, able to prevent future disruption.

And the c-suite desperately needs that help.

Just look at one pharmaceutical CEO, who predicts the industry will move from global supply chains to more localised providers.

You have the opportunity to use data in a similar way to improve resilience.

But you might have to think about the way you see data, says Penn.

Great data meets three criteria:

  • Real-time
  • Structured in a way that’s easy to consolidate
  • Combines information from lots of different areas

Penn calls this ‘thick’ data, “which means that as opposed to just hiring let’s say a data scientist to crunch your numbers you’re also bringing in remote sensor engineers or ethnographers, sociologists.”

Those different perspectives are crucial to finding the best solutions.

We can drive innovation  

And that includes collaborating with your suppliers. 

Just look at Apple.

When Steve Jobs unveiled the first iPhone in 2007, the screen was plastic.

Yet the next day, Jobs noticed the screen was covered in scratches and called his VP of Operations, Jeff Williams, demanding a glass screen for the official release.

Williams said it couldn’t be done in just six months. Every glass prototype they tried had smashed, and it would take years to create a shatter-resistant, thin glass.

But Jobs insisted.

So Williams worked with speciality manufacturing company Corning to create damage-resistant Gorilla Glass in time for the launch.

Now every smartphone in the world uses Gorilla Glass.

It’s interesting to note Williams joined Apple as Head of Worldwide Procurement. He’s now COO and tipped to replace CEO Tim Cook someday.

That proves procurement teams can meet specific business needs by working with suppliers to innovate, says Dr. Marcell Vollmer, Partner and Director at Boston Consulting Group

He says every procurement function of the future will drive supply innovations – including saving our environment.

Dr. Penn agrees. 

“To go it alone is just not sustainable,” Penn says. “You need to look at building common frameworks and using standardisation.”

And that includes sustainability.

We can save our environment

After all, Penn cites McKinsey research that 80% of greenhouse gas emissions and 90% of the impact on biodiversity come from the way supply chains are managed.

Depressing, right? It’s actually great news. It means we can have a huge influence on creating a sustainable supply chain – together.

Penn uses the example of the 240 million packages sent daily. Of that, 40% is dead space.

But new technology can scan each object and use optimal packaging. 

“That means that you can reduce the 40% air and ultimately all the derivative effects, down the supply chain of the plastic use and shipping and storage requirements.”

Another example is monitoring factory emissions in real time by combining satellite imagery with machine learning.

Clearly, there are countless ways supply chain professionals can make the planet better, says Supply Chain Revolution CEO Sheri Hinish.

“Supply chains are the conduit for building a better world; designing a better world,” Hinish says.

“We can come from different backgrounds, different parts of the world but at our core, we fundamentally want the same things. 

“So, it’s real and when you think about collaborating within a global context… this is what wakes me up every morning – to create a world that’s bearable, viable and equitable.”

Our beautiful future

That’s why all three of our experts say procurement has a beautiful future.

Combine your skills with technology advancements, and you’ll have endless opportunities to lead significant change.

And if that seems daunting, don’t worry; you’ve got experts on your side.

“Feel free to be in touch as you develop your data strategy and your AI strategy to accomplish your sustainability and resilience goals, says Dr. Penn.