Next Level Purchasing: Growing Upstart Targets Global Procurement Certification/Community (Part 4)

Please click here for Part 1, Part 2, and Part 3 in this series. This final post is based in part upon content from our 2008 Spend Matters Perspective, What is Your Best Option? Procurement Certification and Training Today.

When considering the niche that Next Level Purchasing is attempting to fill in procurement education and training, it's important to realize that procurement skills are falling short of what organizations need to fully address the demands placed upon a function that is often running leaner than ever. Spend Matters' research on the topic from 2008 suggested that fewer than 10% of the procurement workforce in North America has a procurement certification or has gone through a formal degree program in supply management or a related field (e.g., operations research, supply chain management). This number likely hasn't climbed more than a percentage point or two in the past couple years. Add to this that for many, on-the-job training is insufficient, and it becomes clearer why certifications may seem attractive.

As part of our research process in 2008, Spend Matters spoke with a number of CPSMs, including those who also held the CPM designation and other industry credentials. All were unanimous in their support of CPSM and the belief that it tests many more of the elements of supply management that procurement team members need to excel in today's environment than past ISM certifications. They also view the new certification as testing applied knowledge more than the ability to memorize a textbook definition to a problem (which was more the case with the CPM). Perhaps the only criticism of CPSM certification among certification holders was that it was not yet well known inside their organizations -- especially outside of the procurement function.

Our analysis suggests that for those who have the time to pursue the certification (not to mention the available training courses and tutoring to learn the material and the basic qualifications to earn the designation) that the CPSM represents a smart investment that will exceed dividends over time. However, aspiring CPSM holders should plan significant time to learn the material and budget three half-days to take the test in the designated, third-party testing facilities which may or may not be convenient to travel to.

Spend Matters spoke with a number of SPSM designates, the majority of who had also gone through formal ISM training (and held the CPM designation). According to one SPSM, "from a cost standpoint, it makes sense ... the fundamentals of the content were very valuable." This executive believes that the strongest value proposition of the SPSM program is the foundational base it provides for the entire supply management process.

All certification holders voiced strong support for the SPSM certification from a time/cost/value perspective. Others cited the pragmatic training (e.g., how to use Excel in a procurement environment) provided a useful foundation that they easily applied across their job function. International students studying for the SPSM like the fact that the entire coursework and testing is done online. This could potentially lead to broader global recognition of the SPSM brand as growing numbers of international practitioners undertake NLP's course of study.

The quality and foundational base of SPSM's course of study surprised many of the graduates we interviewed. For them, the certification was far more valuable from an applied knowledge standpoint than the CPM. Unfortunately, it is difficult to draw a comparison between the SPSM and the CPSM given we did not speak to anyone who held both certifications. Our own cursory investigation suggests that the curriculum is actually quite similar.

However, given the reach and breadth of ISM, we hypothesized in 2008 that the CPSM certification would ultimately become better known among companies whose procurement team members actively participate in ISM and related groups (e.g., CAPS Research). We believe this cursory analysis proved correct in the past few years, as among Fortune 500 companies, we believe there is much greater brand affinity/association for the CPSM certification than the SPSM (this is not a scientific analysis, but is based on the daily interactions we have with procurement managers and executives).

Perhaps the most important finding from our certification research is that for the more advanced professionals (who are likely to also be members of ISM), the SPSM certification is not viewed as an "either/or" pursuit relative to ISM's own training. Rather, certification holders view it as a complement that is useful in its own right. Our analysis suggests that for procurement professionals looking to maximize their applied knowledge in their field, SPSM provides one of the most streamlined and effective courses of study.

Still, certifications are not essential in procurement (unlike accounting and financial analysis, where they are almost ubiquitous among those who progress in the field). The now thousands of interviews that the Spend Matters team has conducted with procurement executives in the past decade suggests that advanced degrees in the procurement or supply chain areas are not necessary to rise to the top of the profession. For example, MBAs and engineering graduate degrees can provide a just as effective -- when supplemented by additional on-the-job experience and outside training -- knowledge base and career growth platform as a specific procurement or supply chain academic degree.

Yet for those who want to pursue a non-academic accreditation, procurement certifications can provide not only excellent value in terms of both time and cost for existing members of the profession -- they can be invaluable springboards for those just getting into the procurement field. For this reason, we think Next Level Purchasing has a bright future provided it can build a stronger brand in North America outside a handful of larger customers to complement its already growing global reach. Still, looking at risk, we expect NLP to increasingly see CIPS and ISM on the global stage attempting a top-down play inside multinationals for training and certification.

- Jason Busch

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