Procurement as “Trusted Advisors” – well, sometimes…

We featured David Atkinson’s excellent piece on the role of procurement yesterday. He sees the “trusted advisor” as the role to which procurement should aspire.

I’m largely in agreement with him; procurement isn’t going to achieve the same barriers to entry that, for instance, medicine has (and that’s taken hundreds of years, we might note).  So I don’t think a stance that every bit of buying must be done by a CIPS member is going to work. Perhaps that’s a shame, but it is the pragmatic conclusion.

However, I would slightly take issue with him on a couple of points – or at least add to his general hypothesis. The first point is that while we may become the “trusted advisor” in many organisations, there is still what we might define as a procurement governance role. By that I mean setting and managing the procurement policies and governance framework under which the organisation will operate.

That would include obvious policy decisions around delegated levels of responsibility, rules of engagement with suppliers, fraud prevention and so on – but also definition of the systems, processes and technology that will support the procurement activities (including P2P, sourcing, spend analytics etc.)

Now my colleague Jason Busch suggested in one recent discussion that some of those areas might sit better with Finance, leaving procurement to the more truly commercial activities. That’s certainly one thought, but there is a logic in procurement keeping ownership of spend governance responsibility. An interesting area for debate in itself!

The second caveat is that we tend to talk about “procurement” as if it was a homogenous entity, when in fact it is clearly not. So talking about the role of procurement as a Trusted Advisor, as David Atkinson does in his piece, is highly relevant to much procurement in the public sector, or banking, or other service type industries.

But it doesn’t resonate at all I suspect to retail buyers, who are generally budget holders and are driven by providing products their customers want to buy. It is not the right model (probably) for much of manufacturing industry, where procurement will work closely with operations but is likely to have a more direct role, with clear responsibilities that go well beyond that of an  “advisor”.

There’s another overlap here arguably between procurement and wider supply chain activities, which may be a further interesting dynamic over the next ten years. The critical nature of physical supply aspects for manufacturing businesses, such as logistics, transport and stock management (not to mention outsourcing, offshoring and so on) mean those wider issues can be at least as important as the core “procurement” tasks such as market analysis, supplier selection and commercial deal making.

So when we look at the future of procurement,  perhaps we need to be careful to distinguish between these different genres of “procurement”? We’re going to come back to his over the summer, so we’ll try and be careful about this in our future discussions.

Voices (4)

  1. TimBya:

    If you follow the text book procurement cycle, I think the whole process is an exercise in collaboration between professional procurement staff, the budget holder and other key stakeholders. In this cycle there are places were we lead (e.g. sourcing/contract letting), places we advise (specifications?) and places where we support (aspects of contract management). We do need to be engaged through the entire end to end process as an overriding responsibility is to provide the overall assurance that we are getting best value for money at all stages…. Boundaries should be fluid as some stakeholders require more managing than others and this is why modern procurement is more about collaboration and influencing than demarkation.

  2. Ian Heptinstall:

    “Trust” – that’s where the governance piece comes in – and its so important for a business.

    Do others not trust procurement folks because (i) the procurement team is not good enough, (ii) because they enjoy the fun of “shopping” with someone else’s money or (iii) there is someting untoward going on, and their resistance is a smoke screen to stop someone else poking thier nose in?

    As a profession we seem often to duck this last one. Agreed 99%+ of resistant colleagues will fall into the first 2 groups, but anyone in an organisation of a few hundred people or more is very likely to have one or two in the last group.

  3. Dan:

    “Advisor” is not a problem – most procurement teams fulfill that role already, albeit at a more ‘tactical’ level. Its the “trusted” part that poses difficulties.

  4. bitter and twisted:

    Call me cynical, but ‘trusted advisor’ seems to be a good way to dodge both the grind of daily operations and the responsibility of strategic decisionmaking.

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