Procurement Institute Wars? Will CIPS respond to ISM acquisition of ADR NA?

We featured the news last week about the US Institute of Supply Management (ISM ) acquiring ADR North America. There’s no doubt that the UK  based Chartered Institute of Purchasing and Supply will be watching this move with interest. The major Institutes are becoming more and more commercial, and are particularly keen to develop their presence and business in China, the Middle East and Africa. CIPS has done this very successfully in recent years, with considerable strength in Africa (and now CIPS South Africa) and Asia (CIPS Australasia ).

That commercial focus has led to the governance changes which we wrote about at length last year, which give CIPS more flexibility and responsiveness. CIPS has also just made what could be a significant senior appointment.

Duncan Brock

Duncan Brock, who was Procurement Director at Black & Decker, NTL and Royal SunAlliance Insurance  before working with the consulting firm Future Purchasing (FP), has been appointed Customer Relationship Director for CIPS. We heard that Brock’s remit is to develop CIPS’ business with major corporates globally, but we asked CIPS what his role is, and eventually got this from Brock:

"To build long and successful relationship with our customers, providing them with products and services that help them develop and improve their procurement and supply chain capability.”

One interesting aspect is that FP and CIPS are working together to market PROCAT, a version of Track8, the FP category management product.  Brock was leading that effort, so I wonder how the directors of FP feel about CIPS tempting one of their key people away and into this role? But he’s a smart and experienced professional, very highly respected – and liked – around our community, so he could do a very good job for the Institute.

It is also perhaps indicative of the changing approach to look at the CIPS Board of Management. New appointees this year are Guy Strafford, Gordon Crichton and Richard Masser.  None of them are what you might call traditional big organisation CPOs, who historically made up the vast proportion of CIPS Board members.

Strafford is one of the founders /directors of the buyingTeam, leading outsourcing and consulting service providers – a very clever chap. Crichton is “Directeur du MAI Institut du Management de l'Achat International” in Bordeaux (although he’s British) and runs what is claimed to be the largest procurement related Masters programme in Europe. He’s a very successful and bright educator and manager.

And Richard Masser was elected from the CIPS Council - unlike Crichton and Strafford, I don’t know him. According to CIPS he is “CEO of Crestwood UK plc and also MD of Quantum Global Product Solutions" – two firms who don’t appear to have websites. He’s not on LinkedIn as far as I can see – but apparently he is something to do with importing furniture related items from China. All very mysterious.

Other Board members include Peter Rushton, the immediate Past President, who runs Optimum  – another outsourced service provider, and Will Parsons – a consultant / trainer. With another Board member no longer active in procurement, “traditional” practitioners are just about outnumbered now. And it’s fascinating to see there is no-one there from the IT / Telecoms sector, financial services or the wider public sector (non-Whitehall) – sectors that were very strong on the Board when I was involved 10 years ago.

What does this mean? It may just be chance, but it seems to reflect the desire to be more commercial, and focus on generating revenue through being, in effect,  a professional services firm. And that is exactly what the ISM acquisition of ADR does of course on the other side of the Atlantic. So it will be interesting to see if there is any direct response from CIPS – might they go on the acquisition trail? CIPS has worked through partners up to now, including Supply Management and various training / education providers, but might they take it to the next level?

ADR UK is a separate firm to their US affiliate for instance, and has a good working relationship with CIPS – might buying them be a good response from CIPS? Or Future Purchasing itself would give CIPS access to some globally leading edge intellectual property as well as the PROCAT software product? Or there’s always Spend Matters UK – available for a very reasonable price!  (Only joking. )

But there are dangers in this strategy – we’ll take a look at them in another post on this topic shortly.

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Voices (3)

  1. dave henshall:

    Nice assessment Peter and I concur with Charles’s thoughts.

    I have long felt that the procurement professional bodies have been falling behind industry reality. Our profession is genuinely global – not many professions can say that. This globalization of our profession has long called for a restructuring of the professional bodies representing it. Just as buyers have long practiced supply base rationalisation, the institutes need to consolidate. CIPS and the ISM are the two giants who can lead this.

    There are many other smaller institutes who struggle to represent their members adequately and in a cost effective way. Integration with larger players would be good for their members and afford these bodies with economies of scale, access to best practice intellectual capital, and the profession with a stronger voice with governments and commerce around the world.

    A consolidation of our global institutions makes a lot of sense. CIPS and ISM already share access to each others members – perhaps one scenario could be a CIPS – ISM merger :).

  2. Charles Dominick, SPSM, SPSM2:

    Good post, Peter. I think that these institutions have found that the traditional not-for-profit approach can no longer keep pace with business, first, and the competitive pressures of others that seek to provide higher-value education, second. I look forward to your continuing coverage of how CIPS and ISM try to adapt to the different procurement education landscape that they’ve found themselves in in this 21st century.

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