ProcureCon Indirect – a successful event, a confused procurement profession

As it clashed with my Real World Sourcing session, I could only make day 2 of the ProcureCon Indirect event last week. I’ll give you some general impressions today, then come back with a couple of more detailed articles later based on the presentations I saw.

The Millennium Mayfair in London was a good venue, with a pleasant ambience, and a good conference room. Organisation and administration were good (during my visit anyway) as you’d expect form an organisation of ProcureCon’s experience. They had “200 registrations” but on the Thursday morning, there were about 100 people in the conference room.  There were also around 20 sponsors with exhibition stands – that was split over two areas, which worked OK but probably wasn’t ideal. However, the sponsors seemed to be happy and were definitely attracting interested delegates.

The VMS providers were well represented, with Beeline, I Q Navigator and Fieldglass, along with purchase card providers, a few consultants including Xoomworks, Xchanging and Corbus representing the outsourcers, and providers from travel, FM and a handful of other sectors.

What about the overall messages from the presenters? The key question really for us is this - are procurement functions getting greater influence over the whole area of indirect spend and developing greater capability and knowledge in the field?

I’m not sure. In many organisations, yes, that is the case, but there certainly were some conflicting messages. Now I’m picking some of this up from Supply Management magazine reporting, as I missed day one, but it strikes me that anyone trying to get some sort of good practice template from the speakers in order to develop indirect procurement would be somewhat confused.

For example, Royal Bank of Scotland talk about moving away from a cross-organisational category management approach, which they developed very successfully over many years,  into something much more focused on the internal client. So their procurement effort, structure and strategy is now based mainly around internal business units, not categories.

But then Rolls Royce lay out their approach  - based on “Category ‘deep dives’. Taking a more holistic view of spend” and “Encouraging buyers to address spend globally”.  A strong approach to leveraging category spend across a large international organisation.

So is category management dead – or just being redefined? Should we be business focused or category aligned?

Meanwhile Paul Alexander, director of indirect procurement at energy giant BP, reported again in Supply Management, says “It is not the role of procurement...  to stop the business spending money” . But then we heard other presenters talk about “spend governance” as being a key part of procurement’s role.

So are we (in part at least) our organisation’s spend gatekeeper– or purely a service function to the front-line business?

Now I’m not commenting at this point about who is right and who is wrong. There are some huge questions sitting behind this , which I want to explore much more fully, but it strikes me that we’ve got a bit of an issue in our “profession” here. I know it is easy to say that “every organisation is different” and should therefore have its own appropriate procurement approach. But it’s also hard to claim we’re a profession (which I don’t believe is true in the full sense of the world actually), when we can’t even agree between ourselves just what it is that we do!

And I don’t know how we would have looked to our senior business stakeholders if they had seen the range of approaches, all being presented as best practice at last week’s event. Food for thought anyway.

Voices (2)

  1. Ian Heptinstall:

    Do I spot a leading question in there Peter?

    Surely category management that is not business focused is not very good category management? The technique of category management can be applied at differing levels in an organisation, whether global, or just a singe location.

    There is no reason why an organisation cant have both business intimacy and broader category management. Over 20 years ago Dick Russill developed his CLAN organisation model which aimed to change from the periodic swing from centre to SBU dominance, to one which combined the best of both worlds. It works well.

    Similarly I agree it is not the role of the procurement profession to stop a business spending money. I want businesses to spend more (implying they are growing). I do feel that we have a role to prevent the business making predictable and unnecessary mistakes when working with their suppliers (and wasting money is one such potential mistake). So maybe the spend gatekeeper role – if seen as one of waste/risk reduction – is not incompatible with Paul Alexander’s comment

  2. bitter and twisted:

    Discord is a good thing.

    If best practice was settled, your stakeholders wouldnt need you – theyd just buy a book.

    Who – apart from CIPS imperialists – cares what the borders of ‘The Purchasing Department’are? – as long as the work is done well. I hope BPs spend governance on safety devices for deep water oil extraction equipment is now done by an engineer, not a ‘purchaser’.

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