Tag Archives: procurement career

3 Ways To Make It Big In Procurement and Supply Chain

Tom Derry, CEO – ISM shares his three top tips for early-career professionals who aspire to be a CPO or Head of Supply Chain in a leading organisation.

The next generation of CPOs and Heads of Supply Chain will need to be “next-level” talent.

“It’s easy to point out a few critical success factors for people who have risen to the very top of the profession,” explains ISM CEO – Tom Derry.

In this article Tom shares his three top tips for early-career professionals who aspire to be a CPO or Head of Supply Chain in a leading organisation.

1. Align yourself with the best in the business

One of most important things to do during the early years of your career is to align yourself with the best talent out there. “If you’re just getting into the field or are early on in the field discover who has the best reputation, who’s the best leader and who’s regarded as being leading-edge and running a great organisation” Tom suggests. It’s also advisable look at the company’s reputation. “It’s clear that certain companies have created an awful lot of talent in our profession, disproportionately more talent to other companies.” So find those great leaders, at those great companies and that’s going to be a launching pad for you.”

2. Be courageous

“There are a lot of metrics of dubious value that we often pay attention to in the profession that have outlived their usefulness.” Tom says. He advises professionals to try and link what they’re doing day-to-day with what’s driving value for the firm – whether it’s bringing new products online, introducing new features to new products, driving top line revenue growth or increasing earnings per share by reducing cost. “Speak the language of the business and link explicitly what you’re doing to driving those kinds of outcomes.” This will help you to gain respect because that’s how we keep score in business and those are the measures that matter the most.”

3. Be competitive

“Businesses are about competition,” asserts Tom. “It’s about competition between firms but, frankly, it’s also about competition within the firm to gain resources to win the opportunities for promotion and advancement.” Tom believes it’s important to understand that you are competing, you’re being regarded by your superiors in the firm in terms of your output and your productivity. “You’re in a competition for advancement – maybe it’s advancement within the firm, maybe it’s advancement in another firm but you have to recognise that and put your game face on every day. As they say in sport: leave everything on the field. At the end of the day someone may outcompete you if you’re not taking that approach.”

Part Five of Tuesdays with Tom is available now. Click here to sign up and hear ISM CEO Tom Derry discuss top tips for aspirational early-career professionals, how high profile leaders can become talent magnets in supply management and the latest data on salaries.

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

Your Procurement Resolution: Don’t Settle For Best-In-Class

What better time to set and start tackling key objectives for 2019? Your new year’s resolution is to be better than best-in-class…

In this time of personal New Year’s resolutions, it seems appropriate for leaders to also consider a resolution for their departments. For Procurement leaders in particular there couldn’t be a better time to do so. In recent years, the function has made tremendous progress in transforming into a strategic value driver.

Yet, as leaders broadly acknowledge, this transformation journey still has a long way to go. A recent study by the Hackett Group found that only 63 per cent of procurement organisations have even developed a plan for digital transformation and 33 per cent bluntly stated their service does not meet customer expectations. A Forrester study on enabling smarter procurement found only 22 per cent believe their reporting and analysis is where it should be and only 22 per cent that they have the required agility to respond to changing requirements.

So what better time to set and start tackling key objectives for 2019?

My recommendation is to set an aspirational resolution that reflects procurement’s true potential. One that is distinct from your MBOs, which are likely based on continuous improvement of performance aimed at closing the gap with best-in-class.

The problem with best-in-class

There is nothing wrong with benchmarking yourself and striving to improve performance to match the best of your competition. Organisations should do so, especially if still early in their transformation journeys. Success will result in greater value to those organisations. But achieving best-in-class performance won’t result in procurement becoming truly strategic, and may actually hinder progress in the long term.

How is that so?

Look at it in the context of the World Cup (or the upcoming Superbowl). Every team in the tournament earned its spot by being the best in their region. Hence, each team can be said to be best-in-class. Yet only one is the champion and that team doesn’t win by playing at the same level as their best-in-class peers but by playing better, doing something critical differently. Best-in-class is not a competitive advantage in sports, nor in today’s increasingly winner-take-all market. It is a stepping stone on the path to true greatness.

If leaders are to build competitive advantage and truly drive strategic value, they have to think beyond best-in-class and view that as an interim objective on their transformation journeys. Leaders must ensure that the people and technology they embrace to navigate those journeys have the capability to take them the full way, and not become a constraint at some point.

Yes, your top competitors are doing this right now

What exactly does going beyond best-in-class entail? Is anyone actually doing this? Yes they are. Your top competitors are extending their competitive advantage even as you’re reading this. Below are just a couple of examples:

  • Revenue: A leading Telco leveraged the flexibility of our platform to create a private marketplace where suppliers can bid for used mobile phones in mass volumes, generating hundreds of millions of dollars each year
  • Innovation: In 2014 Meritor launched a three-year initiative to drive massive value by transforming their supply chain in what can be thought of as a drive to achieve best-in-class. They then followed that with a new initiative to unlock massive innovation through a unique approach to new product introductions, configuring our platform to their ideas. The result? Their stock price rose from $4.45 to $13.30 at the end of 2016 and much further since, far ahead of competitor growth.

Note that in both of these examples the teams implemented best-in-class processes and wanted quick value. It should never be a compromise. But they kept the ultimate objective in mind and brought on the right talent and technology to take them to the next level when ready.

The talent challenge

In any meeting with CPOs I have attended in recent years, the top pain point raised is attracting and retaining top talent. Talent that is up to the task of driving successful transformations, to best-in-class and beyond.

The above examples illustrate an important point about talent, and the symbiotic relationship with technology. What good is top talent if your systems are too rigid for them to bring their best ideas to life? Out of the box best practices are important, but that shouldn’t mean constraining yourself from doing a few strategic things differently.

Meritor has a great team with great ideas. So when deploying software, they took embedded best practices but ensured they had the flexibility to easily configure once they were ready for that next phase. This empowered them to realise a unique and innovative approach that supported their financial success.

Realise your true potential

So as we enter a new year, filled with endless challenges and opportunities I encourage you to set a procurement resolution. One that, if achieved, will set you on the path beyond best-in-class, to building a competitive advantage. One that will empower your talent to truly make procurement strategic and realise your true potential.

Procurement Careers and the Power of Intent

Jason Ng explores the power of intent when it comes to embarking on a procurement career…

StunningArt/ Shutterstock

In your career, you will come across procurement professionals with finance and accounting qualifications ranging from CPA, CA or even CFA – all of which are complimentary to procurement however unnecessary to enter.

If you dig a bit further and have a conversation with one of these professionals, you’re very likely to find out that they “accidentally fell into procurement” or “didn’t really know what procurement was, and before they knew it X years had passed”. These answers, although interesting, trigger a multitude of questions about the level of passion and commitment to the profession.

Do they like procurement? Or are they just happy with the pay check? Would this have changed if they were properly informed at the start and consciously chose procurement rather than have procurement choose them? Of course, the power of hindsight is a powerful thing unless you are early in your career and have the greater power of choice, which I am hoping you have at this point of your journey.

During my seven years in procurement I have come to realise that I am certainly part of the minority of people who embarked to learn and understand the profession before seeking a career in it. This has set me apart from my peers as the drive to understand what more I can learn about procurement excites me way more than waiting for my pay check as a means to an end.

As procurement is not a mainstream profession (unlike finance, accounting, law, marketing or economics) it took months of research, following industry news and embarking on a Masters of Supply Chain Management before I made the leap to switch from a money markets dealer on the trading floor of a major Australian bank to being a junior burger again in the procurement world.

Some of the articles I came across at the time included procurement divisions literally saving struggling companies by negotiating better deals and contracts with their suppliers.

It became very clear that during the tumultuous times post-GFC, procurement functions were leaned upon to save companies’ backsides by reigning in corporate spend to make them profitable and stay afloat (Profit = Revenue – Costs. Through reducing the costs components of this equation, companies stayed afloat). This intrigued me immensely as it was prevalent in grocery stores, department stores, aviation, banks, pharmaceuticals, car manufacturing, telecommunications, hospitals etc.

What I was seeing was that this function called procurement was a critical part of organisations whenever the proverbial sh*t hit the fan. It also made me imagine what it would be like to work for a famous brand like Microsoft, Louis Vuitton, Walt Disney or Starbucks because procurement was seemingly in every organisation. My imagination went wild with the ‘what if’s’ and lead me to my path of further discovery and thirst for understanding more about procurement.

If you have just started in procurement or have stumbled upon this article in your quest to understand more about a career in procurement, then what I leave with you is the power of intent. The intent to forge a procurement career will create an inner drive of learning and ultimately succeeding in this field that far outweighs the three lettered qualifications from people who fall into procurement.

Just to put into perspective how far procurement reaches, everything needs to be bought, whether it’s the seat you sit on in a plane, the parts that go into a McLaren on the F1 track, or the food to stock the shelves at the supermarket. Everything has a price and in this profession it is the role of procurement to negotiate what that price looks like and the terms around it.

Four Ways To Cultivate Real Confidence And Supercharge Your Career

Often we think of confidence as something that the lucky few are born with and the rest are left wishing for. This simply is not true…

Aaron Amat/ Shutterstock

Think of someone who you say is confident – your boss, a colleague or a celebrity, perhaps. Chances are you’d describe them as poised, hopeful and positive. They know their strengths and they know their weaknesses, too.

Often we think of confidence as something that the lucky few are born with and the rest are left wishing for. This simply is not true. Confidence is not a personality trait or a fixed attribute; it’s the outcome of the thoughts we think and the actions we take. Confidence is learnable.

It also isn’t based on our actual ability to succeed at a task but on our belief in our ability to succeed. It is the expectation of a positive outcome – regardless of whether this relates to our belief in our ability to speak in front of a large audience, to learn new technology, to lead a team, to handle confrontation, to change jobs and careers, or to start a business.

With consistent effort, and the courage to take a risk, we can gradually expand our confidence and, with it, our capacity to build more of it. Here’s how to do that in four ways.

  1. Show up as the real you

Having the ability to show up with real confidence means you know yourself, you can be yourself and you show up as the best version of yourself. This is more than getting out of bed, splashing some water on your face and fronting up at your desk hoping you can cope with what the day throws at you.

You believe you can draw on what you are great at. You believe what you’re good at is important, and that it’s aligned with how you are working. You believe that you are valuable and valued.

Showing up as truly confident over a sustained period of time is something that needs to be built from the inside out. ‘Faking it until you make it’ only gets you so far and for so long. Trying to pretend you have the confidence needed to get the job done can be exhausting.

2. Stand up for yourself

At work, especially if you’re looking to get into a leadership position, you need to speak up when no-one else will. You need to be visible, make unpopular decisions and go slow in order to go fast. You must stand alone in a crowd and have the confidence to believe in yourself. You don’t need to be the Dalai Lama, but you do need to stand up for what you deem right, fair and important.

When it comes to building your confidence in standing strong, ask yourself:

  • What do you VALUE? To speak out, you have to know what to speak about. To stand up for your beliefs, you have to know what you stand for.
  • What is your PURPOSE? Steve Jobs once said, ‘Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful, that’s what matters to me.’ That’s a clear sense of purpose. He was clear about what he stood for and why, and you need to be too.
  • How RESILIENT are you? Inevitably, when we stand up, we are putting ourselves at risk of rejection. Building your capacity to get back up again is important in maintaining your confidence during adversity and setbacks.

3. Speak up and have a voice

A sure way to fail in today’s demanding business environment is to keep quiet when you should be speaking up!

People often tell me that they don’t speak up because they are not confident and they fear being judged. My response is, ‘So you would rather be judged on just sitting there and saying nothing instead of taking the opportunity to have a voice and potentially getting it wrong?’ The likelihood is that we are going to be judged one way or another.

Many of us also back away from speaking up to avoid conflict. We see conflict as bad, rather than being able to reframe it as healthy debate. As a result, we keep our opinions to ourselves – thinking that if we just keep doing our job and delivering the outcomes, we will get ahead.

Yet we must be willing to speak up, even when it is hard or unpopular or you feel like it will cause conflict. As Martin Luther King Jr put it, ‘Our lives begin to end the day we become silent about the things that matter’. So, use your voice!

4. Step up your performance

You need to have the confidence and skills, and the ability to take on an element of risk, no matter what role or industry you work in. To step up confidently, you need to master your mindset, build your personal brand and have great sponsors.

Reflecting on your current behaviours and stepping up as required is critical. You often need to do things differently tomorrow from how you are today. You need to take yourself out of your comfort zone – and be confident enough to do this – and be aware of your context and what the environment requires of you because this is always changing.

If you’ve got your ‘head down and bum up’ all day long, knocking off your to-do list, how will you be able to assess what you need to do to influence and ensure the work makes real progress?

Continue to challenge yourself and ask, ‘If what got me here won’t get me there, what do I need to be doing now to step up?’

When you do this in line with all the other confidence skills, then you start to cultivate your confidence and supercharge your career.

Michelle Sales is the author of ‘The Power of Real Confidence’ (Major Street Publishing) www.michellesales.com.au

10 Reasons Why You Should Be A Mentor

Mentoring is quickly gaining recognition as one of the fastest ways to develop talent and accelerate leadership potential. Here are 10 reasons why you should be a mentor…

  • Have you ever considered being a mentor?
  • Do you have a mentor?

These are just two of the questions that are starting to be commonly asked in leadership circles as more people recognise the value of mentorship. Both from the perspective of being a mentor, and the perspective of having a mentor.

Mentoring is quickly gaining recognition as one of the fastest ways to develop talent and accelerate leadership potential. What people are also recognising is the value and development that comes with being a mentor.

So here are 10 reasons why you should be a mentor:

  1. You are supporting a future leader

Seeing a leader developing their skills and knowledge first hand, and knowing that you have played a part in this, can be incredibly satisfying. There is a sense of leaving a legacy and fulfillment when you reflect on what you have given to your mentee.

2. You develop your communication and coaching skills

Your improved skills will allow you as a leader to communicate more effectively with the team in your workforce, making it easier to influence your team. It is important to recognise that not everyone is able to immediately step into the role of mentor. Being an expert in your technical field is one thing, being a mentor is something very different.

3. You build networks and become part of the mentoring community

Relationships are a key to your success in business and your network is a powerful resource as it allows you to share information, insights and provide support. The mentoring community is growing as more and more leaders recognise its value.

4. You gain insights into other industries

There can be incredible learning opportunities when you mentor someone from outside your own industry and you will pick up the nuances of that sector. It is very easy to fall into the trap of always looking at things through the lens of your experience and perspective. There is much value to be head from taking a wider view.

5. You are encouraged to practise solutions-based thinking

All leaders need to be able to understand business challenges as this allows them to make solid business decisions. Understand the problem, then spend more time focused on the solution. The practice of solutions-based thinking is a discipline you will be able to take back into your own leadership and own workplace.

6. Mentoring brings business opportunities

It may be that your mentee brings opportunities to you, or you may simply spot the opportunity as a result of the relationship. Depending how active you are on social media, opportunities might also present themselves as you share your insights along the mentoring journey.

7. Mentoring increases your credibility as a leader

Being a mentor can actually increase your credibility as a leader because it demonstrates that you have the ability to develop others. Employers are looking for leaders who can develop other leaders as succession planning becomes more of a challenge for organisations as expectations grow about career opportunities.

8. Being a mentor becomes a sellable skill

Having your mentoring experience on your resume can add to your leadership credibility, especially if you have been mentoring for a number of years. Leaders who are serious about their careers and recognise the value an external mentor can bring. The value comes in the form of a clear perspective because they are not working for the same employer.

9. Leaders who mentor leave a legacy

As a mentor, it is important to consider the legacy you will leave. You can have a lasting impact on people which goes beyond their working life. This is actually one of the most fulfilling aspects of being a mentor because sometimes just knowing the small contribution you have made to the life of another person is incredibly rewarding.

10. Mentoring gives you opportunities for self-reflection

As you work with your mentee on their career path, their career challenges and anything else which may arise, you will find yourself contemplating your own leadership journey. This can be a powerful experience as you will undoubtedly find lessons in your own development which can, of course, be shared with your mentee.

Mentoring is more than just a fancy word for supporting someone else.

It is a commitment of time and effort that is rewarding and provides a sense of fulfillment that goes beyond leadership and management. It is knowing that you have made an impact on your mentee whilst at the same time undertaking some valuable self reflection, which can only have positive outcomes for your own leadership.

Being a mentor is an idea that I believe all leaders should subscribe to and I imagine what the state of leadership might be like if this were the case.

My book Give Back. Lead Forward: Why every leader should be a mentor and have a mentor is published by Major Street Publishing and is available in all good bookshops and online.

Procurement is Already Awesome – Here’s Why So Many #LOVEPROCUREMENT

It’s becoming increasingly apparent that procurement professionals love what they do. And here’s why….

We have all seen how far Procurement has evolved in recent years. The process has certainly not been easy for some; most of us are still on the journey (after all, transformation isn’t a destination) and others have yet to begin. But one thing is clear, procurement has turned the transformation corner and is speeding forward.

It’s not long ago that procurement departments were shunned and dismissed as merely back office administrators. But a lot has changed and the new terminology used to describe procurement is hardly recognisable; collaborative, innovative, data-driven, agile, change agent, advisor. Much of this due is to the broader realisation that Procurement can add significant value to an organisation. But to me, there is even more to it. I believe that the passion that many procurement professionals have for their work and the fact that many of us love what we do plays a big part.

Over the last year, and before that as an industry analyst, I spent a lot of time listening and talking to procurement professionals and it became apparent that people in this function really do enjoy and love what they do. It may have something to do with the fact that procurement is now exciting and invigorated but regardless, I wanted to investigate further. So, at our annual event we asked real procurement practitioners one question “Why do you love procurement?” and the response was overwhelming and quite frankly, surprising. We received over 120 answers, many of which expressed a great passion and  love for procurement. This was enough evidence for me.

The response was so great that we felt obligated to share a few, in the hope that they:

  • Inspire those in this profession (and maybe others)
  • Show that this is not your parent’s procurement; this is a dynamic, modern and challenging profession
  • Prove that many procurement professionals are excited about their roles, what’s in store for them and the impact they can have on an organisation
  • Drive even more proclamations of procurement love (you can submit your own by clicking on the image below)

I couldn’t help myself, so I threw all the responses into a word cloud tool to highlight some of the most common words used:

Why do you love Procurement?

Above are some of the main words used to describe why people love Procurement but here are some actual responses. To see more please visit this page

My favorite one really captures the dynamic nature of Procurement and the impact:

“It gives me that spiderman feeling- middle of the web with the other players and a superhero when we get the cost out.”

Procurement is about relationship building.

“I do not source goods and services, I source relationships.”

Procurement is fun…

“Involves cost, saving, buying, innovation, suppliers and all the fun in the world.”

Who said Procurement doesn’t care about suppliers?

“I love helping suppliers innovate develop and succeed”

Procurement helps make businesses more agile.

“I’m ready to fully respond and support continuous and radial changes in a business.”

Procurement is an exciting place to be right now. It’s a dynamic function that demands a multitude of skills from the traditional negotiation, relationship management and process skills to the increasingly important sales, communication, analytics, innovative technology and more. Many procurement groups are having to familiarise themselves with emerging technologies such as AI, blockchain and IoT. The rapid innovation in these areas and potential impact means that procurement must keep pace.

Procurement is a gatekeeper to potentially the largest source of innovation any company has – its suppliers. Fostering those relationships, building new ones and becoming the customer of choice is critical in this hyper-competitive age.

All of this makes Procurement fascinating. As such, we will continue gathering these quotes from around the world and hopefully generate more interest and excitement about Procurement.

So, if you #LOVEPROCUREMENT, tell us why.

Is It Time To Make A Career Move? Mind the gap

When things get bad at work do you find a way to fix it or consider a career move?

The bad days are becoming more frequent, the work is no longer challenging and your procurement career seems to be floundering.   The question arises: what must you do to kick your work life into action?   If you have a general feeling of being undervalued or not being fairly recognised for your achievements, now is the time to take stock. Work takes up at least 40 hours of your week.  Life’s too short to be miserable, this is decision time.

It is unlikely that your current situation will improve much unless there is a radical change in management or strategy.  The options are:

  • Move into a new role at your current employer or
  • Move on to a different employer in a similar or different role 

Assuming that procurement is still the place you want to be, there are some steps you need to take whether you plan to stay with your current employer in another role or move on to new adventures.

Do a personal gap analysis

Take a deep, introspective look into yourself. The aim is to identify the knowledge gaps between the skills you need for your chosen direction and those that you currently have.  What changes should you begin making to prepare yourself for the kind of job you want? As Abraham Lincoln said, “The best way to predict the future is to create it.”   Be realistic about your current capabilities.  Then go and fill the gaps.

Consider further education   

There’s no doubt that further education and continued professional development play a part in opening up opportunities. The reality is that most the attractive roles require some tertiary education or certification, especially in a tight job market. If you are lagging in this area it may be an opportune time to upgrade.   If your current employer can subsidise your work-related studies, take advantage.    No funds?  There are lots of free training available, there’s no excuse.  What about a Massive Open Online Course (MOOC)?

 Learn the new skills

There are roles that didn’t exist ten years ago and those are where experience is in short supply.  The application of I.T. technologies to procurement problems is growing fast:  consider data analysis and warehousing, supplier relationship management (SRM), and procure-to-pay (P2P).   Also, both the public and private sectors struggle with issues of fraud, corruption and conflict of interest. Companies need people who can exercise constant vigilance over supplier risk, governance and contract compliance.

Sustainability issues are placing new demands on procurement leaders and their teams.  “Green” procurement is a growth niche where there is a limited number of experienced applicants and pressure is building on companies to limit their negative impact on the environment.  Focusing on fields that concern you (and the consumer) and those that play to your strengths will deliver the most work satisfaction.

Get a grip on the numbers

Whatever direction you choose, advanced analytical abilities are becoming mandatory.  An in-depth understanding of financial ratios and the triple bottom line can give you the edge over others competing for similar roles.  If you don’t know what macros or what a cash flow crisis is, now is the time to find out. If your current company offers in-house courses that can enhance your computer skills, sign up.

Influence and persuasion

A survey conducted recently by Accenture amongst global CPOs noted that traditional areas of knowledge and experience are less important to success than the ability to develop and sustain high quality internal and external relationships.  Stakeholders can influence your project’s success or failure.  Good stakeholder management just means being able to win support from any and all interested and affected parties such as end-users, subject matter experts and key suppliers.

Attitude is important, that much is clear.  It seems behaviour and demeanour can impact on career progression as much as technical know-how.  Always do what you promise to do.  To paraphrase  J.F.Kennedy,  don’t think about what your stakeholders can do for you, think what you could do for them.

Communicate your successes

Keep an on-going record of what you have done well, e.g. reported cost savings, accolades you have been given, and positive feedback received from internal customers.  This information can be used to enhance your CV.  Don’t be shy to share your successes; it’s a good confidence booster.

Moving employers   

Moving on to another employer or launching yourself as a consultant or contractor may be a choice, or it may be thrust upon you.  Protecting yourself fully from downsizing and “restructuring of the workforce” is pretty much impossible.  Don’t despair. Review your achievements to date, fire up your CV and take yourself to the market.    Sometimes you have to take a step backwards to move forwards.

The best a person can do to rise above the mainstream is to have a good attitude, stay relevant, keep up with trends, communicate well and keep the networks alive.  Sometimes the current environment is not going to deliver the options you need. Then it is time to move on.

Understanding The Shape And Cut Of Procurement Organisations

Elaine Porteous clears up some common misconceptions about the ways  procurement  organisations can be structured, and demystifies some of the jargon…

Sergiy Bykhunenko/ Shutterstock

 Starting a new job can be both stressful and exhilarating. The people are different, the location is strange and the way they work is peculiar to that enterprise. There may be a seven-level procurement organisation chart or a loose, undocumented reporting structure to be navigated.  What is also daunting is the “in-speak”, the specific terminology which may be like a foreign language to you.

Let’s clear up some misconceptions about ways that procurement can be organised, and try and demystify some of the jargon.

An operating model is just the way the procurement function is set up to work.  Most companies start up being decentralised, unstructured and even disorganised until the workload grows.  As the functions expand and mature, there needs to be some form of formalising and centralising of the activities to consolidate the spend. Only then can we expect to make savings and reduce our risk exposure.

Centralised or centre-led?

Centralised procurement does have its benefits. It means more control over suppliers and contracts and it helps drive supplier diversity and corporate social responsibility (CSR) initiatives.  The risk is mitigated and skills development is made easier, expanding capabilities.  However, it can become a very bureaucratic and expensive cost centre. Too much data and not enough information can cause loss of focus and poor service to stakeholders.  People at the centre do not always understand regional and local supply markets and consumption patterns.  If “central” means the US and the region is Papua New Guinea, there may be cultural challenges too.   As procurement organizations move on and mature, over time, many of them become centre-led, taking some time to decentralise personnel and day-to-day operations.

Figure 1: The procurement journey

Image:  www.zycus.com

Wherever your organisation is on this curve, it is helpful to know what it means to be where.  There is no one best structure. The way your organisation works is influenced by the external supply market, the end-users needs and the overall company strategy. You just have to ride the wave.

Centre-led procurement organisations concentrate on defining strategy and policy for both their direct and indirect procurement.  Corporate spend can be fully leveraged on strategic commodities and services which are well-suited for centralized sourcing.  Non-strategic categories not suited to centralized sourcing can be handled by the individual business units or regions.

Centre-led procurement uses a category management structure which supports the rollout of sourcing and contracting plans to business unit and regional level.  The type of set-up is often called a hybrid model.

Category management means the bundling of third-party spend into buckets to extract more value.  The main aim behind category management is to aggregate the internal demand and achieve economies of scale by contracting the best suppliers at the lowest price.  In its best form, it involves an active category manager to roll out category plans, strategic sourcing and supplier management initiatives.

In a centre-led organisation, a global category manager would set the strategy for the category group, e.g. transport logistics, and for the sub-categories (also sometimes called commodities) within that group:  road, rail and air transport, freight forwarding, port activities and courier services.  At regional or divisional level, the category plans are followed and executed locally to achieve the best results for the organization.  This is the ideal but it is rarely implemented in full. Some categories are really challenging. Marketing services, technology and professional fees come to mind.

Cross-functional teams (CFTs)

To be effective, a category needs to be managed using one or more cross-functional teams.  A cross-functional team comprises representatives of key divisions and business units that work together, with procurement, to achieve the best results for the organization in that category or commodity. Although extensively used in strategic sourcing, CFTs are being used increasingly and successfully across process improvement, product development, quality assurance and the assessment of suppliers.    

The benefits are well-documented:  a more robust outcome, transfer of skills and learnings, improved internal cooperation and sustainable relationships.

Global organisations that run virtual CFTs have special challenges.  With the application of innovative methods and up-to-date online technology, it is now easier and more effective.

Whatever the operating model or the make-up of the CFT, the satisfaction of stakeholders and end users is paramount.  A stakeholder is anyone that has a vested interest in the outcome of your project or action.  He or she could be any one of these:

  • An internal departmental executives, manager or end-user
  • Another procurement team member
  • A co-opted subject matter expert
  • A supplier or a subcontractor
  • A member of the media or a regulatory body

Stakeholders are capable of influencing the success or failure of a project.

The model is not cast in stone

As a procurement organisation matures, it is likely that executives will revise and adjust a hybrid or centre-led structure so that it stays aligned to corporate objectives and continues to deliver value.  The best model is always the one that delivers results through open lines of two-way communication and uses processes that are flexible enough to take into account regional and cultural differences.

Where Are All The Great Procurement Jobs? Broaden Your Vision

Looking for a new procurement job? The good news is that there are a whole load available that are yours for the taking… you just need to broaden your vision!

Do you have your eye on an exciting opportunity in international category management, predictive data analytics, or do you have a passion to make sourcing more sustainable?  The good news is that new job roles like these are emerging in procurement and they are waiting for you.  Conventional manual processes are disappearing as we automate routine tasks, even contract management is deemed at risk: artificial intelligence and algorithms are already being used to draw up “smart” contracts.

Where are all the great jobs?

Corporate companies

Traditionally the most desirable careers were to be found in the big multinationals that have mature procurement organizations; this still holds quite true.  Some of the companies in the fast-moving-consumer-goods (FMCG) sector are leading the way in strategic procurement.  Unilever, P&G, Amazon and Coca-Cola are listed in Gartner’s Top 25 companies in supply chain.  Any one of these companies may be a good place to get a foot in the door and gain solid early experience.

Procurement solutions providers and consultancies

With the development of software solutions for procurement functions such as strategic sourcing, contracting and supplier management, many companies are outsourcing some functions to technically proficient service providers.  These problem solvers service a range of industries, locations and functions. Spend Matters publishes a list of the top 50 solutions providers To Know and another top 50 to Watch.   This list includes some consulting firms, both big and small.  Phil Ideson of the Art of Procurement says that this type of experience can be valuable if you want to go back into a corporate leadership role.  He says “I am a believer that procurement is a service provider to our stakeholders and not a function. Being with a solutions provider really helps you experience the need for customer centricity.”

Not-for-profit and Public Procurement 

Public sector procurement is a real job option.  Don’t disregard the experience that you can get from working on big-ticket items and major projects that positively affect your region or your city. It may not seem as cool as working for Apple Inc. but it may be more rewarding.  There is some perception that working for a non-profit organization means a drop in pay, not so.  Love to travel?  Opportunities to work abroad abound in the many divisions of the United Nations, the World Bank and the Red Cross, at market-related salaries.

Should you get certified or get a degree?

Unlike in finance and legal, there isn’t a license to practice in procurement. However, most employers prefer candidates with a least a bachelor’s degree in business or a professional certification in supply chain or procurement. Which one depends on whether your targeted employer has a preference for certification over a formal degree and what your desired end-game is.

1. Getting certified

Many of my colleagues without a professional certification have never felt that that impeded their career growth or work opportunities.  However, in the early stages of a career, it may be useful especially in locations where professional certifications are held in high esteem. CIPS, CAPM, IACCM and ISM are examples of certifications and affiliations that you could follow. In the UK and in Australia the push for certification and affiliation is stronger than in some other parts of the world.

2. Educational qualifications

Formal degrees in procurement are actually quite rare but there are lots of possibilities in supply chain management (SCM), of which procurement is a key element.  Leading employers source their talent from the best-ranked colleges internationally that offer supply chain advanced education and from the top UK universities with registered supply chain degrees.  If you are thinking it is too late to start, it really isn’t.  Many of these degrees are available online. Always take advantage of an offer of financial or other educational assistance from your employer.

Sometimes it’s all about the piece of paper, sometimes it’s about the affiliation.

“If I knew then what I know now”

I asked some mature and experienced colleagues what they would tell their 21-year old self and this is what they said:

  1. Be curious

Soak up everything. Read widely to stay on top of new trends, changes in regulations and advances in technology.   Don’t always accept commonly held positions, beliefs or strategies as absolute truths.  Question what you see and what you hear. You can look at everything with a fresh pair of eyes.

  1. Get wide exposure

Take advantage of any job rotation that you are offered,  opportunities to get exposure to many industries and many categories don’t come along every day.  Be open to change and chances to diversify your skills. Transitioning between functions helps you build your knowledge and helps you to better understand your stakeholders.

  1. Find a mentor

It may be useful to get guidance from someone who has been through a similar experience.  A well-chosen mentor provides advice and helps navigate you through the trials and tribulations of your career.  Gordon Donovan (FCIPS), of Epworth Healthcare, says a mentor can come from anywhere, even another industry.

  1. Ask for feedback (and act on it!)

Actively seek feedback on the things that you do well and things that need improvement. Sometimes it’s hard to take criticism but it can help develop both your technical and behavioural skills.

  1. Network

Networking does not come naturally to everyone but it is worth developing some skills in this area.  Meeting new people is so important because you never know when it’ll be someone who can help you to open doors or change your direction. Tanya Seary is a champion of networking, you can follow her example here. 

6. Job descriptions are not cast in stone

Many advertised jobs that you come across may be cut-and-pasted from descriptions used in previous recruitment activities.  Too many times employers and recruiters look for what they looked for last time, not what they need now.  If you think you would fit their needs, go for it, there’s nothing lost.

What the under 30’s say

Most under 30’s surveyed agreed with the boomers talking to their 21-year-old selves.  They suggested working hard to keep learning and gaining new qualifications and ask lots of questions.  As Christina Gill, one of the “30 under 30” stars with over a decade of experience in supply chain, said, “This is an exciting time in your career. Be open, be adventurous, be a sponge, listen, learn, and take risks in your career.”

A final thought: organisations that focus on supplier collaboration, unlocking innovation and making the best use of their precious data make attractive employers.

6 Ways Procurement Pros Can Be More Effective

87 per cent of organisations have faced a disruptive incident with suppliers in the last 2-3 years. How can we work in more effective ways?

Transforming into a strategic procurement organisation is not an easy journey. But there are a few obstacles that procurement teams should address sooner rather than later when thinking about how to be more effective in procurement. Here are 6 challenges to tackle today for success in the future:

1. Unproductive business relationships

The majority of CPOs rate their current business partnering effectiveness at less than 70 per cent with hopes of greater than 90 per cent in the future.  How can procurement become a better business partner? By creating a purchasing process that is the easiest, fastest and most affordable way for business partners to do their jobs. Users need what they need to do their jobs and they need those items quickly – and that’s all they care about. If you roll-out an e-procurement solution that is truly the easiest way for employees to request those goods and services within the natural course of their daily work, they’ll use the system and they will see the value that procurement is delivering. And when managers see how this process streamlines approvals and helps them better manage their budgets with real-time tracking, they’ll become champions of procurement as well.

2. Slow, inflexible approval workflows

Speaking over approvals, we’ve seen hundreds of approval workflows, each unique based on business maturity, locations, department structures and technologies. But a consistent challenge among many companies is that approval workflows often make purchasing more difficult for the requester. If requesters could make their purchases without needing to understand approvals or the inner workings of the procurement department, imagine how much easier it will be to get them spending in the preferred manner. Procurement professionals should look at ways to minimize the impact of approvals on the end-user. One way to do this is what we call “line item requisitioning.” This is when the approval workflow is configured so a single requisition/shopping cart can be split and sent through separate approval paths at the line item level. This means that items on the requisition that require fewer approvals get approved and POs are submitted, without being held up by other items that may take longer to get approved or require more reviews. And, the approvers only see the items on the request that pertain to them, making it quick and easy for them to sign-off on the items.

3. Supplier risk & fraud potential

87 per cent of organisations faced a disruptive incident with suppliers in the last 2-3 years. Risk inside of the supply chain remains a focus for procurement leaders. So, what’s the key to reducing risk? Transparency. The more transparency you have with suppliers, the more you can build up those relationships and better understand your suppliers’ needs. Perhaps you find out you have a key supplier that is struggling with cash flow needs – work with this business partner to understand their position and look at strategic payment programs that benefit both parties to mitigate that risk upfront. You can also leverage the wealth of data at your fingertips to pinpoint issues like this early on and better manage supplier data to prevent fraud.

4. Lack of spend visibility

If you want to know how to be more effective in procurement, I have two words for you:  spend visibility.

Every strategic procurement initiative starts with knowing how 100 per cent of the company money is being spent – not “some” of the money, all of it. 40 per cent of CPOs are focused on consolidating spend, but if they’re not seeing the full picture, those efforts will prove futile. Spend visibility – from both direct and indirect spending – allows CPOs to do what they do best, including: consolidating spend, rationalising the supply base, leveraging volume buying, negotiating better contracts, sourcing strategic suppliers and more. The data needed to support all of these activities is in the company spend data.

5. Manual reporting and analytics

65 per cent of organisations are accelerating investment in procurement-related analytics. But you really need to accomplish 2 things before making this investment: 1) Capture 100 per cent of financial data 2) Focus on data science within the procurement department. If you aren’t capturing 100 per cent of your data by on-boarding all your suppliers, achieving 100 per cent user adoption and processing 100 per cent of your invoices through the purchase-to-pay solution, your analytics tool won’t have the data needed to give you the right insight. And, once you have that data, you need someone who understands how to turn actionable insight into results – so make sure your procurement team is thinking about the skills they need for the future.

6. The talent gap related to technology

Related to the skills needed for the future is the talent gap procurement is experiencing, especially when it comes to technology. 87 per cent of CPOs believe talent is the single greatest driver of procurement performance, and yet organisations spend less than 1 per cent of their budget on equipping and training their procurement teams. Think about the tools, technology and training your procurement team needs to keep up with organisational transformation and deliver value, then start developing skills in those areas now – procurement is only going to get more digital. Check out my recent post on bridging the talent gap in procurement for other tips on attracting, hiring and developing new talent for this function.

If you’re questioning how to be more effective in procurement, overcoming these challenges will put you on the course for success. At Basware, we have a heritage in helping companies transform, so you don’t have to go it alone. Reach out– we’re here to help.

These stats are taken from Deloitte’s Global CPO Survey