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The question - “What should a ‘marketing procurement’ professional’s CV look like?” - was posted last week on the Strategic Sourcing & Procurement Group in LinkedIn. Great question during a time when many are seeking work (particularly in marketing and other hard hit fields) and indirect spend is a great, high-profile opportunity in many companies.
In the past few weeks, I’ve seen several presentations from high level procurement pros (D, C or VP level and running the indirect spend programs in their organizations) who have addressed this topic. And in each case, they saw great results by actively recruiting for new procurement headcount from other functional areas of the company.
For example, two weeks ago in Stockholm, Dr. Heinz Schaeffer, CPO for Northern and Central Eastern Europe at AXA, recommended actively pulling people from other departments for open positions in procurement. In the case of AXA - a “financial protection” company in an industry historically distrustful of procurement - recruiting people who had done some procurement tasks in their previous departments was very helpful in building relationships, understand the internal customers needs, and ultimately, gaining results. (Coincidentally, Dr. Schaeffer is presenting a webinar today on his “glocal” sourcing strategy, which may include some discussion of his views on staffing).
Chris Stockwell, VP Procurement Heinz North America, shared a similar perspective last month in his keynote address at Ariba LIVE in Chicago. Chris’ team has aggressively gone after historic indirect spend “sacred cows” in the organization, including marketing spend, which they’ve handled with great success for the last year. Chris said you “need expertise to get buy in from stakeholders” and therefore must “have or hire experts in categories” you are targeting. As I posted previously, Chris’ successful efforts have enabled the procurement team to add headcount during the recession. That headcount has come largely from other departments, such as IT and marketing, and therefore enabled procurement to leverage their new hires’ relationships and category expertise.
It’s a great topic for debate. So, I’d like to open up the floor with a couple questions:
- In your organization, are most in procurement “lifers” in the field or were they pulled in due to unique category expertise?
- If you could pick an ideal indirect team, what would the breakdown be between experience procurement pros vs category experience?
- Any results you’d care to share?
I know it’s a potentially sensitive topic, so leave comments anonymously if you must.
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
11 responses so far ↓
1 Charles Dominick, SPSM - Next Level Purchasing // Jun 22, 2009 at 10:01 am
Justin,
This is actually a very hot topic outside of the media, so congrats for bringing it to the forefront.
Though I have no statistics to back it up, it does seem like I am seeing more and more people recruited from functional areas into procurement. And I’m not talking the “misfits” being sent to procurement when they failed at their former positions, as was the case in the ’70’s and ’80’s. I’m talking top engineers and other professionals.
In many companies, this is working out well. So, for those procurement professionals who want to advance their careers in the field, the stakes are getting higher. They are going to have to be stronger than ever to stay in the game.
We’re working on some research on this very topic that we hope to share soon.
2 Iain // Jun 24, 2009 at 2:05 am
The other things I would consider - scale, the sourcing cycle and insource of skills - for instance in a large global organisation you can create a multi faceted procurement team with a mix of skills and potentially a good career path - bringing individuals in from business units as alluded to in the commentary is a sensible strategy and it is not new (surprising how many things are recycled).
The size of the team will also be determined by the sourcing cycle – big bang or steady state procurement improvement. For smaller organisations maintaining a large team of procurement professionals does not make sense, nor does it have the potential for career progression.
There is a cross over point where external expertise probably needs to be secured on a project-by-project basis for specialist categories.
3 Jason Mark Anderman Free Legal Forms // Jun 24, 2009 at 3:09 pm
I think that using procurement managers without any prior experience in legal services is one of the biggest obstacles to procurement penetrating legal spend. In my experience, procurement departments routinely make the mistake of using a strategic sourcing manager without a strong understanding of the legal field. Legal services are a unique animal, and there are a number of vital issues to keep in mind:
(1) Nature of the Law Firm Beast. You must dispense with the normal approach of treating a law firm as one company, as a law firm is not much more than a group of diverse people, each with a book of business, and the lawyers and staff that support each book. As a result, law firm wide statistics and quality management is often unhelpful and does not drive across the board quality improvement and spend reductions.
(2) No Year Over Year Savings. You cannot set a target of year over year reductions in legal spend. The law department often has no idea, for any given year, what may materialize. A sudden class action lawsuit could be filed, a major construction vendor may walk off the job, or a sexual harassment lawsuit could result. Insisting that the law department spend less money than the previous year without taking this into account alienates the lawyers who are already reticent to support any kind of spend management. The better approach is to compare apples to apples, and try to get year over year reductions in purchasing the same kind of legal service that was previously acquired, as well as looking into whether a particular legal service is needed in the first place.
(3) Legal Background. I’m not saying that the strategic sourcing manager needs a law degree and practice experience at a top Manhattan law firm by any means, but it’s a good idea to get someone who was at least a contract manager or assisted with litigation management in the past, so they can have the ability to properly interface with the naturally resistant legal department and make the most effective decisions to drive cost savings. In particular, I think paralegals would excel in this as legal category managers.
4 WhichDraft.com » Blog Archive » How Procurement Can Engage Legal Expense // Jun 24, 2009 at 3:36 pm
[...] Justin Fogarty has an intriguing post up at Supply Excellence entitled, “Category vs Procurement Experience: Which matters more?“ [...]
5 Jaime Molina at Supplier Negotiators // Jun 25, 2009 at 12:16 am
While it it is important that a Procurement professional know about the product or service he/she is purchasing, there is much more than knowing the technical aspect of these goods or services. In my experience, in order to have an effective Procurement professional they must be properly trained in the field with a degree and/or certification.
I would much rather teach a Procurement professional about a certain category or commody than hire someone without this necessary background which includes “sourcing, negotiations, contract law, spend analysis, supplier management, etc.,” It would take much longer to teach someone in HR, IT, Legal or Manufacturing, when dealing with indirect or direct purchasing to learn about the Procurement field than for this person to learn about a certain category. At the end of the day, the Procurement professional will have to apply all their knowledge in the field to secure the best price, quality and completion or lead times for their goods or services from the supplier that they sourced.
6 Ty Bradshaw // Jun 25, 2009 at 10:40 am
I am one of the individuals which has no “real” procurement experience but was hired by our procurement department from a service department with a very large annual spend footprint. I am having difficulty learning my way around contracts and the like but we have already realized a large amount of savings and greater amount of influence in spend areas which procurement historically had little leverage. I bring a large amount of technical know how with engineered products and hope to make a difference within my department and really help the business. I spent more than a few million dollars of the company’s money in my old role so I did spend a fair amount of time negotiating with our vendors and sourcing many different commodities. I would hope this gives me a leg up with the new procurement role.
7 Steve // Jul 1, 2009 at 5:00 am
successful procurement projects need cross functional project teams working to a common goal. Poor engagement results from; the way that companies budget, low recognition that procurement should be the leading profit centre and lack of shared performance metrics. Good leadership and sponsorship of procurement is essential. Procurement functions benefit from customer relationship, sales training and wider behavioural engagement tools and approaches. Yes technical procurement tools and processes can be learnt fairly quickly and experience in a category helps with engagement. However, the influencing approaches, behavioural tool kits, challenging mindset, leadership skills and conflict managment, takes competence and capability, developed over time. This applies whether you are an engineer or a marketing professional in procurement or whether you are a procurement lifer.
8 Jack // Aug 28, 2009 at 6:18 pm
I agree with Steve although I do share the view of many that ‘outsiders’ to the purchasing function are sometimes more able to align themselves to stakeholders than the average purchasing pro. with limited knowledge of a particular category.However, it is worth considering that outcomes achieved would typically be not too different to the status quo as indeed the ‘outsider’ would typically have a similar thought process as their stake holders.
Personally, I’ve seen that the best results happen when a purchasing expert (i.e multi-category experience combined with leadership skills) works in close cooperation with stakeholders , and with a common goal.
Perhaps, the core issues are whether an organization possesses purchasing experts, and whether purchasing goals and objectives are part of the wider business strategy.
9 How Procurement Can Engage Legal Expense | Contract Alchemy // Feb 7, 2010 at 5:39 pm
[...] Justin Fogarty has an intriguing post up at Supply Excellence entitled, “Category vs Procurement Experience: Which matters more?“ [...]
10 Sediq // Apr 26, 2010 at 11:47 am
Hey thanks for give us put comment i want to help about how many catagory in procurement.
Thanks
11 Bettieclaire // May 18, 2010 at 5:05 am
The size of the team will also be determined by the sourcing cycle – big bang or steady state procurement improvement. For smaller organisations maintaining a large team of procurement professionals does not make sense, nor does it have the potential for career progression.
Procurement Staffing
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