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5 Insider Tips to Make More Money in Procurement

Yesterday, I shared the latest findings from a recent 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 those 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? 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.

CPOs Are Earning More, But Are They Earning Their Fair Share?


The good news: chief procurement officers are making more than before – nearly $500,000 per year on average, without factoring into account equity-based compensation. The bad news: CPOs have a much greater, increasing list of responsibilities associated with the role for compensation that is nearing the rate of inflation. That’s according to an updated CPO compensation study by the Center for Advanced Purchasing Studies and Korn Ferry. The findings suggest that average compensation – salary plus bonus – for CPOs has increased to $467,153 in 2014 from $369,556 in 2006, a more than 26% increase. But the total number of resources reporting to the CPO increased by an average of 50%, to 490 from 247, during the same timeframe.

The Biggest Gaps and Opportunities in Services Procurement

Spend Matters and the Institute for Supply Management have been hard at work surveying members and readers – along with the Society for Human Resource Management community – on the disconnect between the management of direct material supply chains and services supply chains, primarily centered on contingent labor. Today I’ll highlight some of the qualitative responses received from more than 450 participants, who offered their opinions on the biggest gaps and opportunities they perceived in managing services procurement today.

Show me the Money (Again)! Part 2 Ask the Expert Webinar on Procurement/Finance Alignment [Plus+]

Spend Matters will hold another Ask the Expert webinar this Friday at 10 a.m. CDT. Ask the Expert: Helping Finance Help Procurement to Help the Business (Part 2) will feature Spend Matters Chief Research Officer Pierre Mitchell taking participants through provisional results of research conducted by Spend Matters and the Institute for Supply Management on the alignment between procurement and finance. This is Part 2 of this webinar series, based on the SM/ISM poll. Register today!

Tied to Old Ways, Penetration of VMS Solutions Remains Lousy (Part 1: Why?)

Spend Matters is relatively new at diving deep into the world of services procurement technology. We have been meaning to cover it in-depth all along, and now, with fewer resource constraints, we have a great opportunity to expand our research, analysis and blog even more on the topic. Thanks to the ramping input and coverage by Contributing Analyst Andrew Karpie, as well as the continued work from Pierre Mitchell, Peter Smith (who wrote a book on the subject) and myself, we’ve reached the point where we can say “we’re getting there.” But services procurement technology is a massive area, and one that we (and others) have only paid cursory attention to.

Contingent Labor Types: Levels of Formal Management by Spend Type and MSP Involvement

Spend Matters research suggests that the majority of organizations have some type of formal process to manage project-based professional services (e.g., consulting firms), temporary labor (via staffing firms) and certain types of managed services. However, others also manage “lone wolf” independent contractors on one end of the scale and large BPO relationships on the other. The diversity of external labor types is significant.

Exploring the State of the Independent Worker: A Key Services Procurement Component

MBO Partners recently released its annual “State of Independence” report covering independent workers. Independent contractors, whether they work part-time or full-time in this manner, are an increasingly overall component of services procurement programs that are looking to tap specialized skills or take advantage of alternative labor and project-based delivery models (although one that is often not given enough attention relative to the staffing and SOW ecosystem).

Is Services Spending That Much More Challenging Than Goods Procurement?

When you look at modern supply chains, they’re certainly complex, but they’re also run pretty darn rigorously in terms of direct materials spending. Cost breakdown understanding and benchmarking? Check. Inventory requirements? Check? Continuous improvement? Check. Read on to find out how you can participate in a new Spend Matters poll.