Is it time to retire procurement?

Every now and then, a profession seems to go through a rebrand and reinvent itself as something new. Sometimes these are for political correctness (when I started school we had Dinner Ladies, by the time I left, Meal Time Supervisors), or to increase the perceived importance of the role (call centre worker to front line customer support). At other times though, the rebrand is more to do with the changing responsibility and input that the role has as time changes.

A lesson from Sales

Let’s take Sales, as an example. Over the last few decades, the traditional sales arena has transformed with the interconnectivity that derives from the internet and associated technologies. As a result, there has become the wide acceptance that, in order to sell and continue to sell, the focus has to shift away from the 15-minute sales pitch in front of a client and more to a longer term positioning and reputation of a business through all communication channels. I think it’s no surprise that alongside this change, there’s been the obsolescence of the sales moniker and the emergence of Business Development (BD) as an area within the business. In some instances, it may just be good sales people trying to make themselves look more important, but when done properly BD, as opposed to just selling, adds real value to a business.

Is it time, then, to retire Procurement?

I’m not suggesting that we should do away with the function entirely, but should we look at the expanding importance of procurement in another way. Ultimately, to provide value in their workplace, a procurement function needs to do more than just run tenders. It needs to provide support to the rest of the business throughout the entire contract lifecycle: supporting new product development, providing commercial due diligence, managing contracts effectively and, of course, tendering the services at the end of the contract period. However, too often than not, the expectation of procurement teams, and in some instances the wider business, is that running tenders is the sole role of procurement.

The Oxford English Dictionary (OED) defines procurement as:

“The action of obtaining something; acquisition; an instance of this.”

If you look objectively at this definition, then those who think the role of a procurement function is simply to run tenders are probably correct. If you ask the senior management of most firms what their expectation of their procurement function is, then this definition is widely inaccurate.

Which brings me on to my point. In order to avoid the ambiguities of what procurement is and who’s responsible for what, we should do away with the term completely. It should be re-focussed on the output that is expected from the function and may vary by business; whether it be commercial excellence delivery, third party management or external spend supervisory teams. Whilst each of those names are slightly wordy, they move the focus onto a greater value-adding output: delivering commercial excellence, managing third parties, supervising external spend.

It is unlikely that just changing the name of the department is going to immediately reap any benefits. What it will hopefully do is stimulate the debate around the value that a procurement function delivers to a business and how this can be increased and that can only be a positive step. Fingers crossed we’ll start seeing the CCEO or CESS roles popping up soon.

Incidentally, Business Development hasn’t yet made it into the OED as a phrase just yet, so maybe those lexicographers in Oxford aren’t buying what salespeople are selling…

This article was first published in Spend Matters on 16th October 2018.

About the author

James Bousher is an Operations Performance Manager, specialising in procurement and supply chain, at Ayming UK. James has a degree from Cambridge University in Land Economy & Management.

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