Procurement Performers: Raising the Game
Our article about Procurement Performers was originally published as “Leading in Procurement : Raising the Game” in the June/July 2016 edition of the In-Procurement Publication of UK based In-Tend: Procurement Solutions.
In-procurement is a market leading public sector procurement publication to over 3,000 of the biggest decision holders in public sector procurement. Their subscribers include Heads of Procurement, Finance Managers, Chief Buyers and other major budget holders from universities, colleges, local and central government and private businesses from the UK and around the world.
Leading in Procurement: Procurement Performers
Not everyone is a fan of procurement and we may not have many followers. We are often perceived to be the problem children not playing the game. After all, we are the ones to say:
“No, it cannot be done this way, due process has to be followed”.
The 2015 ROSMA Performance Check Study was released in December 2015. The Building a Bolder Legacy – The Procurement Mission Is Under Way Report contains the surveyed feedback from 226 executives from the UK, Australia, France, Germany and the US. The report finds that top procurement performers deliver 7.5 times their costs in procurement and are expanding their lead. The top performers generate about US$1.25 million in financial benefits per procurement employee per year. The bottom-quartile procurement stragglers return less than 1.5 times their cost in value.
The study calls for procurement to step up, close the gap between top procurement performers and stragglers – to raise our game in becoming more innovative in finding and delivering value for money.
The report shows that most of us are followers, not leaders. It confirms that procurement is facing transformation, whether we are ready or not.
“This is not a disruptive force, but a welcomed constructive change agent that challenges us all to ‘raise our game,’ both in terms of productivity and overall results.”
Thomas W. Derry, CEO of the Institute for Supply Management.
The report is worth reading. However, generally CPO’s get to delegate, government officials get to dictate but it is you and I that are impacted on a day-to-day basis by this call to action.
We are the ones at the coalface.
As procurement consultant I work with procurement teams to improve outcomes through finding alternative ways of procurement. However, in my years in a previous procurement life, I directly achieved more than 7.5 times the procurement cost per year sustainably.
I make the list as a top performer. I never set out to be a “top performer”. My focus was to deliver and to lead my teams to deliver the best outcomes from a total cost of ownership perspective.
I performed without leaving a trail of victims and enemies behind me.
Becoming one of those procurement performers is not a walk in the park; it is a journey that takes time, perseverance and a dose of reality. We are a service provider to our internal customers and conduit for building business partnerships with our suppliers.
On the journey as procurement performer, I learned to work with constraints.
- At times, I had to work with antiquated procure to pay systems at times. If not well managed, this can cause death by paper. However as a result of the lack of decent up-to-date e-procurement systems, I learned that if you have a sound procurement framework and are able to focus on the outcome rather than the transaction, one could find ways to manage the paper shoveling effectively whilst still achieving compliance. Sometimes being tied into an e-based system makes your life harder because you have to follow a process rather than let the outcome decide the appropriate process.
Dealing with Customers Trying to Take Shortcuts
- It can be challenging to be the party-pooper. As much as procurement deserves bad press, the reality is that internal customers and suppliers do like taking shortcuts where possible. When you step into a culture where your customers took shortcuts, it takes many difficult conversations to change the culture to one where everyone understands their roles and responsibilities. A title does not deliver respect – you earn respect. Although the situation required difficult conversations at times, if handled in a respectful, professional and educational manner, you break through the barriers and achieve the necessary outcomes.
- One cannot do much about bureaucracy, especially in environments such as the public sector or listed companies. In my experience, the best way to navigate your way through bureaucracy is to communicate on an ongoing basis and to work at discovering any issues as you go along. As people we are vain, we like it when someone asks our feedback and we feel that we are being heard. Great communication cuts through a lot of bureaucracy.
The issue with constraints is that it takes up valuable time causing teams to be unproductive. Time translates to money. Complaining does not help. The best way is to find a way that helps you navigate it rather than fight it.
It helped that I had a few tricks up my sleeve.
Asking the Right Questions
- I ask lots of questions, many of them “why” or “why not”. Through understanding the context and understanding the real issues, I could come up with solutions that worked from a total cost of ownership basis.
The Value of Partnerships
- I build true and real partnerships and “walk the walk”. Partnerships are no different to planting tomatoes. You need to make sure you nurture the plant in order to harvest great fruit. In business, this takes time and nurturing. I started early and continued to build on the partnerships. Instead of waiting for the instruction to find cost savings, I worked with key business partners long before to find total cost of ownership solutions.
Challenge the Status Quo
- I stubbornly refuse to point blank when told, “this cannot be done” until I have found the answers and solutions for myself. I naturally challenge the status quo. Do not accept that when you are told that you cannot do something that you cannot do it. Some of my most rewarding achievements came to light because I refused to accept the status quo.
Practical and Pragmatic
- I see the big picture but also know how to get my hands dirty; luckily, I understand what I need to be do to implement solutions. I know what it takes to be at the coalface at many levels and what it will take to implement strategies. You have to pragmatic and practical in procurement.
Understanding How Business Works
- I have a diverse business background. Therefore, I bring my risk, legal, project and contractor management experience to procurement. I understand how an outcome will affect an organisation. My recommendation is to broaden your knowledge and experience beyond procurement, get to understand the world outside procurement. It makes a significant difference in working both with internal customers and suppliers.
A sense of humour
- Finally, I have an ever-present sense of humour. It keeps me going on those days when it feels as if the mountain is too high to climb. It also helps to break the ice in many difficult communications.
Procurement Performers Disrupt the Status Quo
These days it is my mission to disrupt procurement and to work with procurement performers who want to deliver total cost of ownership solutions. I know we can do it and I know procurement will lead the mission.
Diedra Merriwether, Vice President, Finance and CFO Americas, W.W. Grainger, Inc. commented on the study:
“Procurement done well is more than a frontline battle for improved value from the supply base. An effective procurement team understands the behaviors at play within the organization and also the possibilities in the marketplace—how we work and what we could do. Bringing these insights into decision-making conversations, in the right way and at the right moment, can make or break the level of impact that procurement provides.”
Let’s raise the game in procurement and deliver many more procurement performers!
Ichiban Commercial Solutions Pty Ltd
The views and opinions expressed in this article are those of the author specifically. It not necessarily represent any official policy or position. This document remains the intellectual property of Celia Jordaan; you may not copy, distribute, share, print or use the material without prior written approval.
To download a PDF copy of the article as it appeared in the In-Procurement Publication, please click here.
Celia Jordaan is procurement and risk consultant at Ichiban Commercial Solutions, Perth Western Australia. With over 20 years experience, Celia has worked in different countries, locations and cultures in the areas of procurement, supply chain, contract management, law and risk. She has also worked in the area of risk management, contractor management and safety.