5 Insider Tips to Make More Money in Procurement

Yesterday, I shared the latest findings from a report highlighting chief procurement officer compensation trends. On the executive level, the news is mixed. While CPOs are earning more than ever before, they generally make less than chief financial officers or others in finance, despite a relative increase in responsibilities for CPOs in recent years. This raises a question not just for executives but for those at all levels within procurement: What are the best ways to make more money?

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Here’s a quick list of 5 insider tips I’ve been sketching down in recent months, based on discussions with friends in the industry and even Spend Matters’ own efforts at matchmaking and informal recruiting.

1. Choose Your School Wisely

Go to the right school – not necessarily a top school. Graduates in the top 50% of their class at a Michigan State, Arizona State or Georgia Tech focusing in areas such as procurement, operations research or supply chain management can make as much as or more than recent graduates from the Ivy League or MIT. Along similar lines, focus less on absolute GPA and more on leadership, internships and practical experience.

2. Take Advantage of Scholarship Programs

If you’re young, take advantage of programs such as the Institute for Supply Management’s Richter Scholarship. Trust me – the benefits come not only from the scholarship money and network you’ll gain, but the compensation rewards initially and down the line. As Deloitte and Spend matters noted previously:

“Compensation matters at all levels of procurement – even entry-level positions. With ISM Richter scholars earning as much (or more) out of undergraduate university programs based on our seat-of-the-pants analysis than entry-level management consultants or investment bankers (at least before bonus in the later case), it is clear that some procurement organizations value getting top people in the door from the start.”

3. Become a Hacker

Understand technology and its impact beyond basics such as e-sourcing, and don’t be afraid of building or bringing your own kit. Having limited development skills, knowing those who can code or at least understanding how to use Access – or anything beyond Excel – is a huge advantage, especially early on in a career for solving problems and taking initiative. It liberates you from existing investments such as legacy Ariba tools and lets you hack to solve problems while flying under the radar. Many of my best-compensated friends in both procurement and strategy and operations consulting have been hackers earlier in their careers, taking technology into their own hands.

4. Start Out in Consulting

Gain experience in the operations or strategy side – not just the technology side – of a practice centered on procurement by starting your career in consulting. A Big-5 background or strategy firm background is best to maximize earnings potential throughout a career. The skills matter most, but the pedigree can help with compensation, especially on the first or second moves in-house, which sets the stage for compensation down the line.

5. Learn the Language

Speak the language of either finance or supply chain. Gain experience in one or both areas, either during a formal rotation or, as mentioned above, in consulting through client studies. Being able to straddle at least two areas rather than just having deep functional expertise in one is a ticket to not only career mobility but also to higher compensation, based on recent trends.

Any more quick tips to add? Please chime in.

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