11 August 2008
A recent global report on procurement shows the profession is gaining recognition, but still has to bridge a lack of understanding. Jake Kanter reports
Procurement is "a hot topic," says Richard Nixon, co-author of Beyond Purchasing, KPMG's global study. And while this will not be news to buying professionals, the report suggests wider recognition of this view.
"Given the economic climate, cost optimisation is a key business driver. Procurement will win a seat at the strategy table when it demonstrates its value to the wider business."
Delve deeper into the study and there is yet more encouragement for buyers. Of the 600 senior business figures questioned, three quarters rated the importance of purchasing as either 'high' or 'very high'. The majority of respondents also said procurement controls between 50 and 99 per cent of their organisation's total spend.
Beth Wallace, global head of procurement at financial services firm RSA, thinks the results reflect the growing strength of purchasing. She believes the profession's image has come on "leaps and bounds" in recent years.
Tim Leaver, chief procurement officer at the Land Registry, agrees: "Procurement is very important, especially with the current state of the economy. It's really encouraging that we're receiving this recognition."
But Nixon says procurement still has work to do. The study highlights a concern among buyers that their firms lack interest and understanding of purchasing. And more than a third of non-purchasers argue that buyers don't understand the wider business.
So what is the answer? Guy Allen, director of sourcing and supply services at Fujitsu, says the profession can often come across as "downtrodden". He urges buyers to stop feeling sorry for themselves and become as proactive as possible in demonstrating their abilities.
"It is important to be positive about what you do and think about marketing. If you ever ask a sales person if they did a good job, they'll say they did 'a great job'. Purchasers should take a leaf out of that book."
Allen recommends buyers adopt marketing tactics, such as trying to get achievements announced on their organisation's intranet.
Others have found alternative methods to get noticed. Wallace is working to produce stakeholder "sales packs" for her internal customers, providing examples of how purchasing has achieved savings and contributed to the wider business strategy.
Leaver pulls together an annual "achievement" report for the board - "whether they ask for it or not". It includes information on staff development and supplier risk management reviews. "It's important to publicise achievements, but you can't be too brassy - everything must have a business focus," he says.
Craig Cherry, head of group procurement at Monarch Travel, says it is easy to "get in, get on and get out", with little thought for the wider goals. "A good buyer wants to know what part they have played in everything the company does."
KPMG adds: "Dedicated purchasing experts are essential to cost reduction; bringing to bear awareness of current prices, knowledge of historical trends, alternative acquisition and payment methods, as well as legal, compliance, and due diligence requirements."