Procurian and Procurement Leaders recently combined to publish some interesting research into a variety of issues facing the profession.  We took particular interest in the results of one question which addressed an area which is a significant issue for many of our clients, that of addressing new areas of spend.  The specific question was “What would you need to bring unmanaged categories of spend under procurement’s control?”

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The data is as follows:

More recruitment resources/capacity                              61%

Great executive support/backing                                     53%

Deeper category expertise/market intelligence              51%

Greater visibility of spend levels                                     33%

Specialised tools and technology                                     14%

From a recruiters perspective, and bearing in mind that we regularly work with clients seeking to extend procurements influence across the business, this makes very interesting reading. Based on the anecdotal evidence we have from our conversations with CPO’s and other functional leaders, we offer the following comments:

Restrictions on head count have been a significant handicap for many organisations in the last 4 years and we believe they will have contributed greatly to thinking of the 61% of CPO’s that voted for this option.  We believe this problem showed clear signs of being alleviated in 2012 and anticipate that this improvement will be sustained for the foreseeable future.  It is also worth noting from our own research published during the initial recession that procurement functions were being asked to get involved in more areas of spend but in some cases lacked the resources to cope with the growing workload.  CPO’s have found it difficult to overcome company wide hiring freezes even when making strong cases for roles to be approved.

The biggest single factor in the success of emerging procurement functions within our clients is the importance of executive level support.  Without the backing of influential senior figures in any organisation procurements’ attempts to increase its influence and deliver suitable results is severely limited.  Further down the chain, the importance of stakeholder engagement skills for Category Managers and the like is stressed in virtually every job brief we take and this only serves to reinforce the importance of engaging effectively with business decision makers to develop a mandate for change.

The majority of clients seeking to recruit in Category focused roles prefer to hire someone with specific market knowledge of the relevant spend area and this has been the case for some time.  This is exacerbated when you consider “green field” roles focusing on a area of spend. The common perception is that existing category expertise combined with detailed supplier market knowledge is especially valuable when engaging with stakeholders for the first time, and there is clear evidence to support this. However what do you do if you can’t find or afford that particular expertise?  In some areas like professional services and logistics category expertise is rare, whereas others command salaries typically ahead of normal market rate e.g. marketing, software, telecoms.  Both these issues can be major hurdles in hiring the talent required.  Considering candidates with strong transferable skills is one option, an internal move for a rising star is another that has been used.  We also have some additional methods which have helped our clients in the past with these problems and we are happy to discuss them with you if this is a challenge you are facing within your business.

Visibility of spend is an interesting subject in itself and our experience tells us that some leading organisations are really benefiting from using the best available tools in this area whilst others are still struggling to understand how and where the business spends some of its money.  What we can say with certainty is that the emergence of technology has been a major benefit to those who have harnessed its power effectively.  With the almost constant improvements in technological capability in areas like big data, the potential to improve on this area is developing all the time.

Only 14% registered specialised tools and technology as a major factor, its clear that this is not top of the survey respondents agenda just yet.  However many of our contacts in the Spend Management and Big Data sectors are convinced that it is only a matter of time before their respective markets grow significantly and the emerging trends they see should gather pace.
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What do you think of our comments on this data?  Do you agree with our theories or can you offer a different perspective?  Please feel free to comment below or contact me at andrew@edburydaley.com or on 0161 776 4603.

Sources

Data: Procurement Leaders & Procurian

Analysis: Andrew Daley, Director Edbury Daley