Bringing Unmanaged Categories Of Spend Under Control – Data & Analysis

Bringing Unmanaged Categories Of Spend Under Control – Data & Analysis

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

Procurement Systems & Skills – Are we in Balance?

Procurement Systems & Skills – Are we in Balance?

We are seeing an increasing reliance on standardised tools, technology and systems in the sourcing and negotiation process. Any benefits these can bring in the areas of cost effectiveness, consistency, speed, and the creation of audit trails, are obviously good news.

Our question is whether the widespread use of such technology and systems is creating a generation of procurement professionals who lack some of the critical skills that are required for full commercial competency and agility.

This survey explores the link between systems and core skills.

The growing importance of Supplier Relationship Management

“Supplier relationship management (SRM) is suffering an “identity crisis” as buyers struggle to agree a definition, a study has revealed.”

That was the view of Supply Management magazine when they exclusively reported on our research recently.

“Effective SRM requires installation of competencies, values and behaviours aligned to the delivery against these imperatives and objectives. These competencies and skills are rarely found in the “standard” procurement toolkit.”

David Pomfret – Co-author & Director, 105 Consulting

The data provided by over 300 relevant professionals and subsequent analysis by the Directors of 105 Consulting offers a fascinating view of the subject including:

· What SRM actually means in 2010
· What business leaders expect from SRM
· Who is taking responsibility for SRM in major organisations
· What levels of competence exist across the specialist SRM population

Please read the full report here: EdburyDaley SRM jan 2010

105 Consulting specialises in maximising the value delivered from key suppliers through application of strategic Supplier Relationship Management. It helps clients install and manage the right relationship with new suppliers, maximise the value delivered through existing relationships and, where required, install relationship recovery programmes to improve any poorly performing supplier relationships. Learn more here: http://105consulting.com/105/case-studies

Edbury Daley is a niche recruitment consultancy specialising in Procurement and Supplier Relationship Management appointments. If you would like to discuss SRM career opportunities or need to identify suitable talent for your business please call Andrew Daley (0161 776 4603) or Hannah Jackson (0161 776 4608) or contact us via info@edburydaley.com

The Importance of SRM

Thank you to all those of you who have contributed to our latest online research project since our most recent request at the beginning of September. We have some very interesting comments, and we are again confident of producing a very informative report.

As with our study earlier in the year into the Impact of the recession on Procurement (the results of which are still available online) we are particularly keen to maximise the number of contributors to the research. If you haven’t had chance to take part yet, this is our final request for you to contribute.

The survey takes 5-10 mins and the closing date is Friday 30th October so please find the time to enhance the value of our research. The resulting report will be published in November.

The survey is available here.

The increasing importance of Supplier Management update

We launched our latest survey into “The increasing importance of Supplier Management” earlier in the summer and received our best ever initial response so thankyou to all those who have taken part already.

With such a positive response already we are confident that we can produce some valuable research and aim to complete the report for publication this Autumn.

As ever the value of our research will be greatly enhanced by maximising the number of relevant contributors so if you haven’t had time to do so already, please can you take part by clicking here.

If you have any additional comments please feel free to contribute to the survey blog, or you can e mail us at info@edburydaley.com

More response to our research

More response to our research

Our research continues to attract significant interest and we are well placed to publish the results later this year with a record sample size.  The data and comments already make interesting reading including this one posted earlier this week:

“Real SRM is the one of the most important factors for success in a procurement role. However most SRM being discussed today is in relation to IT systems and not the real soft skills that will bring innovation and improved business performance to bear.”

Do you agree? 

Our experience tells us that there is certainly a lot of investment in Vendor Management in the technology sectors at the moment, and we have been encouraged by the number of SRM specialists who have got in touch with us about their careers since the survey was published.  Again the evidence is that a technology focus accounts for a lot of the biggest SRM roles.

Are you in an SRM or Vendor Management role with a different category focus?  We are keen to hear from you about your experience and your career aspirations.