How do you embed category management expertise in your procurement team?

We’ve seen huge improvements over the last few years in the technology available to support sourcing and contracting activities. If you look at the advanced souring and optimisation tools and platforms provided by the likes of Trade Extensions, BravoSolutions, Emptoris, Iasta, Intenda, CombineNet... they provide procurement with options that we could only have dreamt about when I was a CPO 10 years ago.

Yet they don’t, and can’t, take away the need for human capability. Now that may reside within the organisation doing the sourcing, or it may be ‘outsourced’ to the technology provider itself or another sort of consultant, but someone still needs to gain an understanding of the category, look at options for approaching the market, and make the technology work. (Although sophisticated software is changing the specific activities of the category manager, as we discuss in our White Paper here).

So, assuming you want the capability in house, how do you make sure procurement staff have the right capability to make the most of these advanced tools? Now, I suspect some providers might say that they have certain elements of the required capability ‘built in’ to their software. Certainly, as an example, the project management tools built into the Emptoris platform are impressive.

But it’s rare to see really deep and detailed category management thinking, processes or the related intellectual property “built in” to even the market leading sourcing platforms. So this is where another type of provider can carve out a niche, and several we’ve featured before fit into this space.

You can promote capability via what you might call the ‘traditional’ route of training – and organisations such as CIPS, Positive Purchasing, PMMS and others would see themselves playing in that space. You can combine that with some sort of accreditation, to test whether the capability is embedded; CIPS again and IIAPS promote this route. Or you can provide tools that support the development and then the ongoing use of key skills.  Positive Purchasing again do this with their online Purchasing Academy;  Accenture’s Supply Chain Academy was an early market leader, and tomorrow we’re going to feature another option, two online category management tools from Future Purchasing.

One is PROCAT, offered via CIPS, while track 8 is Future Purchasing’s own version of the similar tool (more customisable than PROCAT).  Both provide online project management tools and intellectual property to assist the category manager through the category and supplier management process. But they stop short of the typical e-Sourcing type capability that involves actual engagement with the supply side.

We featured Future Purchasing here a while back in the context of their excellent report on Suppler Relationship Management; in our view they are consulting thought leaders in both that area and Category Management.  It’s also interesting to note that both they and Positive Purchasing came out of the QP consulting group stable. QP has seeded a lot of strong thinking in both the practitioner and consulting worlds over the years despite its own demise some years ago (and there’s another story...)

One final point before the detailed review next week.  Is there any reason why providers like Emptoris and Bravo couldn’t embed more of this sort of best practice / capability development material within their offerings?  Would that be beneficial to users? Is there scope for greater partnership here that might bring the technology side of sourcing even closer together with the capability development aspect? An interesting thought.  But tomorrow we’ll get into the PROCAT product and see how it might help build category management performance for organisations.

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Voices (2)

  1. Jaye Cook:

    Hi Peter,

    Interesting article, and a question that really does warrant exploration, to ensure that the next (and current) generation of Procurement professionals maximise bottom-line benefit for the businesses in which they work, continuing to raise the profile of our profession.

    I’m an advocate of CIPS (although I’m not sure of the alignment with out and out category Management skills), but feel that the best means of developing capabilities in this arena, combined with an education that covers core procurement, remains an ‘apprenticeship’ of on the job training from experienced and capable procurement leaders.

    This initiates a new, but related, discussion around the time and money current procurement practices and consultancies spend on developing their staff. Do the reputations of those with the best investment in staff development make their way into the marketplace? Does that allow them to recruit the best new talent? Perhaps most importantly (for a profession governed by metrics and measurement), is the ROI or bottom line benefit positively impacted by this, to justify ongoing investment in this approach?

    I look forward to your thoughts.

    Jaye Cook
    4C Associates

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