CIPS Annual Report & Accounts – Honesty About a Tricky Year for the Institute

MS Outlook decided that the notification of the Chartered Institute of Procurement and Supply Annual General Meeting next week wasn’t very  important so it went into my “other” mailbox rather than “focused”, courtesy of Outlook's artificial (lack of) intelligence algorithm, so I only just found it over the weekend.

“Notice is hereby given that the twenty-sixth Annual General Meeting of the Chartered Institute of Procurement & Supply will be held at 16.30 on Wednesday 13 June 2018 at Easton House, Easton on the Hill, Stamford, Lincolnshire”.

You know, one year I really want to propose lots of interesting motions – supported by however many members you need to do that – just to stir things up a bit. I don’t suppose anything exciting will happen next week anyway. However, along with the notification, and like thousands of other CIPS members, I got the link to the draft annual report and accounts, for the year up to October 31st 2017. But I wonder how many people actually read the 51 page document? Well, I have.

And it is worth doing so, this year more than most. Following the very sad and sudden death of CEO David Noble in early 2017, Gerry Walsh stepped in as interim leader, and our congratulations to him (and others involved no doubt) because this is the most straightforward and honest report I have read in years from CIPS. Perhaps because Walsh is in the interim role, he doesn’t feel the need to sugar-coat the issues too much. But I’ve never seen this sort of thing before in a CIPS report:

“CIPS' membership growth is driven primarily by the student population; however the “churn” rate of 20% has continued, mainly due to students allowing their membership to lapse once they have achieved their desired level of qualification. There is continued erosion in the number of full members (MCIPS and FCIPS)”.

“Erosion in the number of full members” – so the headline looks good because of students, with a large number in the developing world, as well as in interesting new markets like continental Europe and Turkey, but that isn’t converting through into the members who will stay with CIPS for 20, 30, 40 years. Actually, we understand that FCIPS is growing, so it is core MCIPS numbers that is the issue.

That is reflected in the finances too. Total group income decreased by 3.2% to £26.8 million “reflecting a tougher client environment and some turbulent international economic environments in both the Middle East and South Africa”. But profits actually held up well – however, a historical tax issue pulled down the reported figures, with net income at £2.1 million, down from £2.4 million.

“As a result of our decision to write off prior year liabilities relating to VAT payments in South Africa, operating profits were depressed resulting in a reduction versus previous year. Underlying profits improved by 5.6% versus previous year as a result of tight cost control across the business”.

Overall, our verdict would be this; there is nothing to panic about, this is still a healthy, profitable and successful Institute, and the long-running pension issues which were a drain on resources seem to be settling down at last. However, the underlying issues around long-term professional membership, and perhaps the increasing competition for commercial revenues, mean that new CEO Malcom Harrison is not going into as comfortable a job as some casual observers might perceive it to be.

We’ll be back later this week in part 2 with a more detailed look at some of the positives and negatives contained in the report. But do take a look yourself if you’re a member.

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Voices (5)

  1. herbert kornfeld:

    CIPS be a bunch o’ whack-ass muthaf***kas that don’ give no props to the freestyle purchasahs tha learnz they skills on tha street.

    1. Peter Smith:

      I find it hard to believe you are the real Kornfeld as he tragically died in 2007 – an accounts receivables gang leader taken out in a vicious inter-office turf war in the Mid-Western office supplies business. Or so the Onion would have you believe… I didn’t know the satirical mag / website had put together this “best of” collection so I’m off to buy it now. (They were really funny columns!)

  2. Dan:

    My favourite bit: trying to work out why membership churn is so high, they conduct a review that 3,000 members contribute to. They don’t appear to have thought to ask former members why they left…

  3. Dan:

    I’ll put my hand up and confess to being one of the ones who have let their membership lapse. £190 a year didn’t seem to be value for money – you get access to some more articles in Supply Management and put MCIPS after your name… and that’s about it. The branch events, are free to non-members as well, and other events are expensive and south east-centric . For a Institution that trains its members to recognise vfm, you’d have thought they would be better.

  4. Mr Grumpy:

    The issue Peter with the churn is once Students achieve full MCIPS status, nothing within their benefits changes. Granted they might see a rise in pay with their current employer and maybe even find their prospects improved, the actual benefits within membership stay the same. The driver for students to maintain membership is so they can study. Very effective carrot and horse. However, once that is over, what is left? In their CV they can say they achieved full MCIPS status via examination and state they are no longer a member. Will that actually harm their employment chances? Possibly. I can imagine account activity diminishes significantly once students become fully qualified. There might be the odd event now and then, but there is nothing to retain members interest. As members we get the quarterly rag that is Supply Management (which is tiresome as it’s the same voices over and over again). If I am being honest there is nothing when I log into my CIPS account that immediately grabs my interest. It’s more of a courtesy than genuine interest.

    I think maybe CIPS needs to survey it’s members and gauge their image and ascertain members perspective of CIPS really is. To me there is a real disconnect between the institute and many of it’s members.

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