Next Level Purchasing: Growing Upstart Targets Global Procurement Certification/Community (Part 1)

Spend Matters has featured occasional coverage of the procurement training and certification market over the years. One of our original Spend Matters research reports, What is Your Best Option? Procurement Certification and Training Today, is still occasionally downloaded. Even though it's dated, and there is more recent information on the ISM CPSM certification uptake and salary benchmarks for example, which we plan to cover more in the coming months, anyone interested in procurement certification and training would do well to at least take a quick pass through it.

Since we wrote that report, a lot has happened in the sector. For one, ISM has a new CEO (actually, he will be new -- he starts this summer. See our recent interview with Tom Derry here, here and here). And Next Level Purchasing (NLP), which is still a small organization, has continued to gain significant traction during the same timeframe. I recently caught up with part of the Next Level team in person and was pleasantly surprised to see how far they've come with their programming. Granted, a majority of their members and a significant amount of their commercial traction is still outside the US, but they're doing a surprisingly good business by pushing forward their own answer to training, certification and now, a group association and network.

Perhaps before delving into the specifics of its certification programming and offering our analysis, a bit of history and context would be helpful. Next Level Purchasing (NLP) started in 2000 and launched its foray into online training the following year. It then released its first procurement certification program in 2004, the SPSM, the answer to what then was ISM's highest-level certification at the time, the CPM. Close to the time of the launch of NLP's next certification, the SPSM2, ISM came up with the CPSM. Curiously, the naming similarity between the SPSM and the CPSM is still confusing to those in the industry years later, but NLP claims they were years ahead of ISM with a similar sounding certification acronym.

Naming similarities aside, today, NLP offers 13 full-length training courses and five express training courses in addition to its two marquis certification programs. Today, about half of NLP's business is from corporate deals -- the other half, individuals. For companies, NLP offers a way to rapidly "skill-up" an internal team. However, I disagree in part with NLP's founder, Charles Dominick, about why larger corporations are embracing NLP and its certification programs (in addition to those who come in from the bottom-up, going through training and certification without a company-sponsored program).

Charles suggests that in the case of certification focus they work with NLP for the status that the SPSM certification grants to its employees, in part as a statement of the growing sophistication of the procurement organization as a whole, at least as a frequent primary objective. Other clients, however, including those looking for better procurement results, develop more targeted programs and customized plans with NLP, sometimes without certification as a requisite component. I believe, having looked at some of the content of SPSM over the years, that organizations like the ability of the SPSM program to convey rapid, pragmatic, applied procurement knowledge relative to the street cred a SPSM certification may grant.

In the US, I personally don't believe the SPSM/SPSM2 holds a candle to the CPSM in terms of prestige -- despite the fact the combination of the SPSM and SPSM2 offers a really solid foundation in the knowledge base required for a typical procurement buyer, manager and executive today. Our research over the years has shown that those who know both programs and in fact, think they each have their strengths and are worthwhile endeavors to pursue individually and together. For those who need to come up to speed quickly on procurement, the SPSM/SPSM2 may be the preferred route.

One of NLP's top verticals for adoption of the SPSM and its training programs is "outsourced procurement," as NLP describes it. It's my hypothesis that BPO firms working with NLP, the majority of which are offshore providers, are treating NLP as a quick way to teach those who know little about Western procurement a crash course in what counts, rather than caring about marching the certifications of their workforce into prospects. This is something we believe NLP should trumpet rather than downplay.

SPSM/SPSM2 is likely to become better known as a brand over time. And while the case may be different overseas given NLP's focus on the global market, for better or worse, ISM still dominates the US certification scene among Fortune 500 companies. For now, I think that NLP would be better served by positioning the pragmatic knowledge in going through its certifications rather than the badge of honor of passing the program -- at least domestically.

Nevertheless, NLP has made inroads in a handful of large US multinationals including GM, Chevron, GE, Ford and Abbott. In addition to certification and online training programs, NLP is planning to ramp up its effort to serve both these as well as its other Global 2000 and middle market customers by delivering on-site training as well, potentially cutting into ISM's business in this area (gained in part through its recent acquisition of ADR).

As we continue this series providing an update on Next Level Purchasing, we'll explore the market penetration of the SPSM programs, salary benefits of the certification and related demographics of participants in the program and NLP followers. We'll also explore where NLP is headed in the future. Stay tuned.

- Jason Busch

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