Profit from Procurement

4PEOPLE: Building a Winning Procurement Team

Who Do We Need in Procurement?

When evaluating the maturity and potential of the Procurement function, a simple shortcut to the answer is to look at its people. How much do you trust them? How often do you see them? And are they understood by the rest of the business? While some companies perform well here, the answers can be the same for others: not much.

Procurement functions don't always comprise the top talent in the company. Part of this is because Procurement has its roots as an administrative function with a constrained remit, as discussed in Chapter 1: Introduction. Which high potential, career-hungry person would choose a position in Procurement if other functions such as Sales, Marketing, or Finance have a more central role in value delivery for their organization?

The problem is compounded because we sometimes don't know what type of people to hire in Procurement, so we just end up hiring those with the word “Procurement” on their CV. And this can reinforce the problem. But there are exceptions. One CPO told me last year that he routinely rejects people who apply to their Procurement team with “fantastic Procurement resumes,” not because they are bad people, but because the skills are too “old school.”

The CPO

Before we get into defining old school Procurement skills, let's talk about who is needed at the head of the function. In this case, we're calling them the CPO, but they could be called Procurement Director, Head ...