Indirect procurement is ‘a sexy place to be’

23 September 2011

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25 September 2011 | Angeline Albert

The challenge of getting indirect procurement right makes it “a sexy place to be” for procurement professionals.

This is the view of Rachael Stormonth, senior vice president at outsourcing analyst NelsonHall, who made her comments during a webinar hosted by procurement outsourcing provider buyingTeam.

The online presentation examined the results of a survey of 120 CFOs and CPOs. Only 47 per cent of those polled expressed high satisfaction with the management of indirect spend in their organisation.

With just 38 per cent of respondents rating the ability of buyers to influence buying behaviour highly, there is an opportunity to make a difference to the business. However, many companies are not taking advantage of this, spending too much time on transactional activities, and lacking the soft skills required to work with other functions.

She said: “The survey shows it’s an open door offered by CFOs who are expecting more from indirect procurement. [But] I hear of bright procurement graduates who are spending their days on low level tasks and are not getting engaged with business units.”

Other challenges highlighted included a lack of mandate because business units have primary responsibility for indirect categories, poor stakeholder engagement skills and lack the flexibility to purchase non-routine or specialised goods and services.

Some 60 per cent of CFOs were dissatisfied with the inability of buyers to influence the attitudes and behaviour of stakeholders.

Both groups of executives want to see greater interaction between indirect purchasers and business units. A way to improve this could be to get involved with projects at an earlier stage. “Indirect procurement must become a ‘trusted adviser’ to business units,” added Stormonth.

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