An interview with Bernhard Raschke (part 1)

As we reported here, Bernhard Rashcke has left PWC where he was their top global partner in the procurement area.

I interviewed him last week in the Spend Matters London office, otherwise known as the Wetherspoons Lord Moon of the Mall (free wi-fi, good choice of real ale, cheap food, rather too many tourists but you can't have everything...) Having said goodbye to PWC last month, he has recently returned from walking the Pennine Way end to end, so looked disgustingly tanned, relaxed and healthy.

Why take this step now? Not many people voluntarily give up the big-firm Partner salary and status!

Well, I’ve been doing this sort of work for 20 years. That’s a long time. And it feels like now or never, with a significant birthday coming up too! I want to see if I can create something for myself, do something innovative – maybe my confidence in this is foolish, we’ll see. I have two relatively young children so I am not ready or able to really retire yet!

So what are you going to do next?

I have a number of interesting ideas that I’m still exploring – it will be in procurement, but is likely to be more innovative and entrepreneurial than what I’ve done before. I may be more portfolio or I may end up focusing on one big idea.

How do you see the future of consulting in general?

The big four see the future is in consulting, as their audit business is flat and likely to remain so. Those firms outside the big 4 who have a clear identify will do fine – like McKinsey and BCG. But some in the mid-market are going to struggle and there will be mergers and acquisitions. But it is not easy to integrate professional services acquisitions, so it may be a risk to buyers of professional services if this consolidation does happen.

What about the procurement consulting market?

I’m sure the big four will do fine. But in procurement particularly, there are more niche players around now who have grown and are now meaningful options for sophisticated buyers. They should get stronger.

What’s improved in procurement practice since you’ve been involved in the profession?

There’s a greater awareness from Boards of what procurement can contribute, particularly at critical times – like restructuring or acquisitions. Industries with low margins are pretty aware of procurement and take it more seriously than ever. But that is less true where margins are better or in sectors where at least some Boards haven't caught on to the importance of procurement  - like Financial Services.

There’s more focus now on CPOs and what they can deliver. Information is better, processes are documented. But we still need more capability in the profession to tell the story about value. That’s in part because procurement is often too introspective - we need to understand the business better, shape and empower the business to do it better rather than trying to ‘control’ everything. It’s still about truly understanding how procurement links to the business agenda.

That probably took us neatly into what hasn’t improved! Anything else you’ve observed that’s been less positive?

Still many of the basics are not good! Like negotiation skills, they are very variable. Then issues such as how to mobilise teams, develop sound sourcing strategies, implement demand management  - many organisations still struggle with these fairly basic techniques. And we have better data, but not always the insight to make sound decisions from that data.

We’ll have more from our interview with Bernhard Rashcke tomorrow.

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