Art of Procurement

In this episode, AOP Host Philip Ideson and Kelly Barner (AOP Content Director and Owner of Buyers Meeting Point) discuss their major take-aways from August’s news, industry topics and podcast interviews. In August, we split our time between active procurement practitioners and thought leaders. Dana Small, Global Category Manager at BioMarin Pharmaceutical, talked about her transition from finance to procurement (yes, on purpose) and shared how being a business blogger changes her perspective on her ‘day job’. Then Jason Cammorata, Vice President of Strategic Sourcing at MDC Partners, spoke about the qualities that make conflict “good” for an enterprise and the teams within it. On the thought leader side, Hélène Laffitte, Founder and CEO of Consulting Quest, provided insight into best practices for sourcing consulting services and Procurement Insights Founder Jon Hansen pointed out that while companies can’t transform without going through procurement and supply chain, we aren’t alone in the disruptive challenges we face. This month’s discussion topic is technology implementation ‘turn arounds’. Since implementations rarely go smoothly without considerable planning and communication, something both Philip and Kelly have experienced personally, nearly every implementation needs a turn around. Often, this stems from the misplaced expectation that implementation = digital transformation, and vice versa.

According to research undertaken by today’s guest, Procurement Insights Founder Jon Hansen, 70% of an organization's digital transformation activity passes through the procurement and supply chain. But is procurement prepared to step outside the frameworks of our historical job descriptions to proactively enable our companies to create and execute their digitization strategies? In today’s podcast, Jon and I discuss: Why the unknowns of digitization are impacting executives across the company, not just in procurement. The key obstacles to digital transformation. What can procurement do to take a leading role in enabling enterprise digitization

No one wants conflict for its own sake, but it can actually be an important factor in personal or organizational growth and decision making. Rather than shying away from conflict, especially in a professional context, procurement professionals need to start embracing it as proof of diverse thought and opportunities to practice empathy. That is the point of view espoused by Jason Cammorata, Vice President of Strategic Sourcing at MDC Partners, and one that he is quite passionate about. Is this podcast, Jason shares his advice about how procurement can approach “good” conflict – a dynamic that usually stems from multiple people with different ideas but equally good intentions. The procurement team at MDC Partners faces a unique challenge. They are an “umbrella” company with 55 brands in marketing that provide services such as public relations, creative, digital, advertising and production. Their decentralized corporate model is largely brand driven, so Jason regularly has to sell the benefits of procurement internally. That conversation usually starts with introductions and explanations and quickly advances to discover what the brand needs and how procurement can support them. In this podcast, Jason answers questions such as: · What is more important: technical skills or personal skills? · When should procurement be firm (but nice) about frameworks and processes, and when should we be flexible? · Does procurement face a unique set of challenges today, or are we battling the same issues as all other functions? · What does relationship-driven procurement look like, and what are the benefits of investing in that approach?

It seems that we live in a service-centric world these days, and that includes a growing number of procurement spend categories. Although we’ve made headway in IT, legal and marketing, there is one category of professional services spend that still gives most of us reason to pause: management consulting. In this episode of the podcast, I ask Helene Laffitte, Founder and CEO of Consulting Quest, some of the questions I hear most frequently about managing consulting spend. For instance: How can we find the ‘right’ consultant? When should I lean towards small/boutique consulting over the big brands? Are daily rates an effective pricing model? What if we don’t know exactly what we need from the consultants (yet)? What are the primary drivers of price in a consulting services agreement? Ironically, when managing consulting spend, procurement’s best opportunity to add value may occur long before the list of participating providers is finalized and the RFP is sent out. According to Helene, the most critical activity when sourcing consulting is defining scope, objectives, milestones, deliverables and deadlines. These components will not only drive the qualification and selection process, they may determine whether or not the whole engagement is successful. As Helene points out, procurement’s ability to listen and discern the difference between what the business is asking for and what they need is essential. And once that need is defined, we move to challenge #2: being “tight” on what is needed while being “flexible” about the approach.  Listen in for advice and insight on this complex services spend category from a proven consulting procurement expert.

The commonly-cited disconnect between procurement and finance all comes down to one central question: where did the money go? As hard as procurement works to negotiate and track different types of savings, they always seem to evaporate or be reallocated for other projects. In the best cases, this gets the enterprise more value for their dollar, but in the worst cases can lead to reduced credibility for procurement – especially with finance. I’m joined today by Dana Small, Global Category Manager at BioMarin and author of the Ms. Category Management blog. It is rare to find a procurement professional with a background in finance, and rarer still to find a procurement practitioner so willing to share their insight and experiences that they start a blog. In Dana we find both, and that’s a real win for the procurement community. While working in Financial Planning & Analysis (FP&A), Dana realized that by the time an efficiency opportunity is identified by finance, it is usually too late to act upon it. So she decided to move ‘up’ in the process, and pursued a role in strategic sourcing. At the encouragement of a colleague, she began sharing her experiences via a blog in early 2019. Doing so has not only bolstered her professional reputation, it has also changed how she reflects back on her “day job”. In this podcast, Dana talks about the importance of reflection and perspective in all procurement work, whether it is tracking savings, working with suppliers or engaging with the community at large.

Last week, I had the opportunity to facilitate a webinar last week with procurement consulting firm Efficio, titled Driving Greater Procurement Performance from Complex Direct Spend and Factory Indirects.  In the webinar, I was joined by two of their US-based principal consultants, Arthur Mattouch and Waldo Saville.  During the webinar, Arthur and Waldo shared three case studies demonstrating the strategies and tactics that can be used to deliver sustainable savings in a mid-cap manufacturing environment.  In today’s podcast, I am sharing this case study, along with a couple of questions that I asked during the webinar.  This is a company looking to quickly reduce costs through a coordinated cost reduction program, while minimizing disruption on the business.  As you will hear, they ended up switching suppliers for only 12% of the total number of parts. To watch the entire webinar on-demand, including the supporting presentation, you can register here.

What do childcare, ducks, and power have to do with negotiations? In today’s episode, host Philip Ideson shares three negotiation tips taken from his experience as a procurement practitioner and entrepreneur. 

As we enter the summer, I’m going to spend some time answering some of your most frequently asked questions.  These pod’s are going to be bite-sized, so I’d love to hear your feedback on whether you like the shorter podcasts or not.  One of the topics that I get asked the most about is negotiations.  So for the next couple of weeks, I’m going to share some insights based on my own experience. This week, I’m going to dig into the archive and share a part of a podcast I recorded 3 years ago - specifically with regards to the question of how to maintain supplier relationships after a tough incumbent negotiation.  It is a topic that I have a lot of experience of - both from the practitioner and service provider sides of the table! 

If procurement is going to attract the ‘best of the best’ to join our ranks, no matter what their background, then at some point we can expect to work alongside someone with no experience in procurement. Whether such a move is successful is likely to be dependent on the individual transferring in as well as the overall culture of the organization. I interviewed Liam Moniz, Manager of Procurement Systems & Services at Fortescue Metals Group, during SAPAriba LIVE in Austin, Texas. Two years ago, Liam had no experience in procurement, and, as he told me, “didn't know a purchase order from a purchase requisition or invoice”. Based upon his success in other roles, the business brought him into procurement to be a fresh set of eyes as they invested in process, technology and talent transformation. His background in IT Service Delivery and Support prepared him for the technology-focused parts of transformation, but process and customer satisfaction were another matter. To address those, Liam leaned on his understanding of business objectives and his desire to engage with stakeholders in pursuit of value – including through the implementation of guided buying.

Whether you are a consultant or a practitioner, it seems like the grass is always greener on the other side. Consultants are constantly on the road, work late hours and are subject to high expectations from their management team and the point people on each customer account. Practitioners find themselves at the mercy of consulting teams they didn’t personally decide to hire, lack the influence naturally extended to external parties and are often left to deal with the details – and the devil in them – once the consultants have flown off to their next engagement. I’m joined today by Mark Richardson, Head of Procurement, Fleet & Administrative Services at AAA Southern California. He is uniquely qualified to discuss the differences between procurement consultants and practitioners because he’s been both. Having joined AAA initially as an individual contributor, he now manages the team who were initially his peers. In this podcast, Mark addresses the challenges of making the transition from consultant to practitioner and making the transition from peer to leader.