Intellectual Talent in Procurement – Who Knows What’s Out There

First up on our Hot Topic for February is Stephen Ashcroft, procurement consultant with Brian Farrington Ltd (which has probably trained a fair few of today’s CPOs over the years), sharing with us his insight into Procurement Talent.

How does a CPO ensure that there is the highest quality of intellectual capital in the organisation?

Is there a robust methodology for finding out? In our experience there is always hidden talent. And on the opposite side of that coin are those who are spent forces.

The thought of learning from best practice behaviour would appear to be a beneficial area to explore. This is unlikely to happen because there is no requirement from CIPS for procurement specialists to engage in continuous development. For a research programme, I was delving into the archives (what a hi-life for me!) reviewing a UK-Government audit report that stated:

‘Competitive procurement is used patchily by local authorities’

It backed up this worrying, over-arching statement with compelling observations:

  • 70 percent of authorities having difficulties with competitive procurement
  • 17 percent of authorities in the top-performing category – they have both the capacity and commitment to use procurement effectively
  • 80 percent of procurement strategies are incomplete
  • there is a strong relationship between positive attitudes to competitive procurement and service improvement judgements

The auditors and inspectors cited the challenges that must be overcome if Procurement is to deliver valuable outcomes – and that Authorities (the researched organisations in this case) with the necessary skills and commitment can, and do, overcome, namely:

  • legal complexity
  • risk aversion
  • perceived supply market weaknesses
  • lack of client-side capacity
  • narrow approach, and
  • organisational culture

The report advocates a systematic approach to procurement to overcome these barriers. The steps in this approach are:

  • laying the foundations – using a strategic approach, having clear procedures, involving the right people and accessing the right skills
  • design – this stage is fundamental to service improvement. It involves strategic challenge, understanding the market, scoping the contract and the make or buy decision
  • bidding and contracting – this is the implementation stage when good project management and communication are essential
  • continuous improvement – once the service is established it is important to maintain the momentum of improvement using rewards and motivation for the provider and a strong client-side function

Drawing on the findings and conclusions of the audit commission report: what are the six talents needed for effective procurement?

CPOs should ask whether their procurement team and stakeholders have:

  1. Strategic thinkers -- able to tackle improvements in a service area and with the right skills
  2. Business acumen -- the skills, drive and commitment to convert that strategic vision into contractual compliance and continuous improvement
  3. Financial expertise -- to establish the business case and to understand the costs of each of the components within the proposed procurement
  4. Legal expertise -- to create the details of the contract agreement giving due consideration to recent case law
  5. Skilled negotiators -- competent to excel against the best that the supplier has
  6. Contract managers -- to hold suppliers accountable for their performance and take decisive action when they fail

CPOs should reflect on the adequacy of the resources they have to deal with all of this.

That would be a positive start.

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Voices (3)

  1. Paul Wright:

    The problem with this is that we are asking for highly skilled, experienced and competent commercial people in procurement. And they are expensive. Many organisations think the best way to save money is to cut the number of procurement people, or replace experienced staff with jumiors. Procurement excellence pays for itself in a year or two – staff cuts pay off immedately (and start costing money shortly there after) so are more attractive to some people

  2. Patrick Chabannes:

    Sales. Call it “client-side or business”, in reality it is all about sales, turnover & growth.
    CPO with a sales vision can break barriers.

  3. Patrick Chabannes:

    Sales skills, sales skills. You can call it “client-side” or “business”, in fact it is always about sales. If CPO can take over the technics and give business value, $$, they will really be in their role

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