Why Don’t Organisations Undertake Category Management? Future Purchasing Responds

We’ve written extensively about the Future Purchasing survey and report on Category Management, and in March we ran a webinar with Mark Webb, the MD of the firm, and Professor Marc Day from Henley Business School who was also heavily involved with the work. We received lots of good questions from delegates and didn’t have time to answer them all – somewhat belatedly, this is our first article looking at the interesting questions and the points they raise. (You can still listen to the webinar here - registration required to obtain access to the webinar).

So our first question is simply this -  “why do organisations choose not to undertake category management?”

Professor Day points out that “the study was not necessarily about studying NOT doing CatMan but how it is undertaken”. But, he says that we might suggest that not doing CatMan could result in a low survey score when it comes to the self-assessing of capability. In the case of low performers, then there are significant skills gaps in these areas:

(1)    category strategy creation

(2)    internal selling of category management

(3)    behavioural and stakeholder skills

(4)    supplier management

(5)    project management

So, these may be weaknesses getting in the way of CatMan introduction or progress. The survey results also suggest there may be a 'foundational' effect of engaging with stakeholders. “By this I mean the following: it is often suggested that having a strong leadership team and stakeholder support is key for CatMan success. But, we find this to be less important in the data. It appears that stakeholder approval for CatMan is an important part of the initiation for capability development but then stakeholders become less involved the more the (procurement) capability is developed”.

On the same question, Mark Webb speaks from his experience of working on hundreds of CatMan projects and programmes. “It is often that the procurement leadership team either cannot sell the concept and business case to management or the executives above procurement see category management as an unnecessary complexity - 'isn't it just shopping?' The CPO has to be capable of explaining and selling the concept”.

Personally, I would add something about organisational culture to the debate. If an organisation runs in a very decentralised, entrepreneurial, devolved manner, then imposing any process that looks like it is bringing rigour and control will face some obstacles. In such situations, procurement leaders need to think hard about how they can move forward and gain some of the benefits of a CatMan approach without alienating their stakeholders. It may be that a simplified or more flexible version of the concept needs to be the first step here.

I’d agree with Mark about the procurement leadership team’s ability to sell the concept being key, of course – but I also wonder whether sometimes the CPO or equivalent lacks confidence in CatMan if they have not previously worked within a good programme themselves? After all, if you have to “sell” something, it is important both to understand it and ideally have some real personal belief in your product!

Anyway, don’t forget you can request the excellent and illuminating Future Purchasing report here, and you can still listen and watch the recent webinar with Mark, Marc and me, Peter Smith, here.

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