If your organization has an International Purchasing Office (IPO), you likely jumped through quite a few hoops to get the doors open. Management buy-in, staffing, budget realities, goals, regulations and logistics are just a few of the challenges involved. So, a hearty pat on the back is in order…but don’t get too comfortable because you’re not necessarily out of the woods yet.

Now is the time when the IPO has to actually deliver on its promises - sourcing efficiency, costs savings and a foot in the door of emerging consumer markets. And as such, it’s a time rife with fresh new challenges.

The primary pitfalls that trip up many IPOs early in their operations are:

• Staff Turnover - Obviously losing good people is a disruption. But given the added challenges of finding good people, who understand the product requirements, players and nuances of a particular low-cost country, poor staff retention can really hit an IPO hard. The antidote is competitive pay and a positive work environment that includes cultural sensitivity. As I have pointed out before, wages for top people abroad are often comparable to those in the Western business world. So, be ready to pay what it takes to keep good people. The positive work environment is also essential. IPO employees, like those in any other office, want to feel like they are contributing to a larger team effort. And at the same time, understanding and adjusting to the culture of your IPO’s employees is extremely important.
• Underestimating Category Managers’ Role - Finding, nurturing and leveraging the knowledge of your IPO CMs is absolutely critical to success. Failure to find the right CM team (or 3rd party to fill the gap) will leave your IPO without direction on opportunities and local strategies. Or finding the right team, yet failing to empower them to make decisions, will underutilize the very people who could make the IPO successful.
• Unsuccessful Projects - Fair or not, negative first impressions are hard to erase. So getting a couple of quick wins under the belt to establish a positive first impression for the IPO is key to ensuring an IPO gains credibility and solidifies executive support.
• Metrics - Proof is in the numbers. Having solid data to show the gains an IPO achieves - in savings, delivery time, quality and reduced risk - go a long way towards earning trust, influence and an expanding sphere of spend under management.

Katie Siegle is a Senior Consultant in Ariba’s Spend Management Services group. Katie works with global manufacturers on international sourcing and procurement projects.