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7 Secret Things You Didn’t Know About Successful Procurement Teams

Some senior members of staff see procurement expenses as a necessary evil and overlook any efficiency improvement methods for this sector. This is not an uncommon way of thinking, as procurement and the supply chain is a massive part of any company’s costs and can total up to 70% of an organisation’s total spend.

These managers are missing out on effective changes that can shift procurement to a significant supplier of growth and profit for any business.

Follow these 7 steps to improve your procurement team.

1.         Embrace Change

It’s so important for procurement managers to embrace and invest in technology changes currently taking place in the industry.

Managers should hold a full assessment of deficiencies in their processors and search for technology that meets the needs of the business, rather than fitting the business around new technology. For example, if you are having trouble with historic and retrospective analysis, invest in predictive analytics.

2.         Consider Outsourcing

Outsourcing may not be an avenue you have ever considered in regards to procurement, even though it happens all the time with HR and IT departments. Even so, many procurement managers are still apprehensive to apply it to their supply chain.

Outsourcing certain aspects of procurement can be a way of improving existing systems and processors rather than a cost reduction measure. It can also allow your business to access highly skilled procurement experts when it would be counter-productive to hire someone internally. These individuals are often very focused on delivering results, and if you plan outsourcing correctly, the increase in productivity will outweigh the costs of outsourcing.

If a procurement manager feels like there are areas in the business where costs can be cut, it might be worth bringing in a consultant. There are also outsourcing services that offer expert domain knowledge and vendor contact opportunities.

3.     Ensure Your Supply Chain Is Properly Staffed

The efficiency of a supply chain is very much dependent on the quality of its staff. As a procurement manager, it’s important to ensure that the supply chain is staffed with highly skilled individuals, and that these staff have regular access to education and training.

Procurement professionals will be tasked with a wide variety of roles, including:

  • Planning delivery timetables
  • Ensuring stores have enough stock
  • Overseeing the arrival of shipments

When hiring employees, it’s important to ensure they have skills such as communication, attention to detail and teamwork. They must also be willing to learn and improve throughout their career.

4.     Create Risk Management Policies

One of the key ways of making a procurement team more efficient is to prepare for the unexpected. Procurement managers should establish proper levels of control to manage risk and ensure that all these policies are periodically reviewed. These risk management fail safes should include:

  • The financial impact a risk might have
  • The likelihood to the risk occurring
  • A priority list for managing risks

All staff members should be aware of these risks, and the processes in place if the risks occur.   For example, if a major supplier goes out of business, your staff should be aware that there is a process for contacting secondary suppliers so you are never left without stock.

5.     Establish Relationships with Key Suppliers

Staff who deal with suppliers on a daily basis need to have brilliant relationship building skills. Procurement employees need to work closely with suppliers to try and keep communication consistent and amicable, even if issues arise at either end.

Suppliers can help procurement teams reach their performance goals, and they are often very knowledgeable, with expertise to share about their products. Procurement teams can learn a lot from them, like the audience, seasonality and key selling points of products; it’s worth working on these relationships.

6.     Stick to Ambitious but Manageable Targets

If a team has a tough but not unattainable goal to work towards they can prioritise, measure and focus on their tasks with a clear end in mind. This helps staff members feel more motivated and gives meaning to their work.

There will also be a sense of achievement when the targets are met, bringing your team closer together and improving teamwork.

7. Efficiency Is Attainable

The creation of a brilliant supply chain depends on your company’s understanding of procurement, along with the procurement team’s estimation of the total costs associated with each supplier and their contacts.

With help from technology, outsourcing, a great team and strong relationship building skills, your procurement team should improve its efficiency and business impact.

 

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A Day in the Life of a Project Manager

Managing Daily Routines: A Day in the Life of a IT Project Manager

We all know that project managers are responsible for managing projects through to completion while remaining on time and within budget, but how exactly do they do it? What does a typical day look like for a project manager?

Here’s a sample of what a typical day might look like for a project manager.

The Early Bird Gets the Worm, Success Comes to Those Who Prepare Well and Put in Effort

8.30  am: Starting the day
After settling in for the day’s activities, it’s time to plan out the day. Start up the computer, email clients, draft team schedules, organize time sheets and  create the to-do list.

To-do lists help managers and their teams stay on track. If a manager notices that one team member has yet to deliver an assignment, they can address this issue first thing in the morning; otherwise, delays can build up and affect the project. Likewise, lists help managers see the next course of action for projects.

9:15 am: Time to get moving

Efficiency is a must and there is no time to be wasted in project management. After a quick review of project plans and to-do lists, the manager must be prepared to get his team moving right away.

Round up team members, review the project’s current position and emphasize the next course of action. In order to get the team moving on assignments, strong project managers set deadlines throughout the day.

Morning team meetings are also necessary to make sure each member understands the project and their assignments. It’s also a time to answer any questions for clarity or to get feedback or concerns from individuals.

While daily group meetings can be important, they are not always necessary and can be counter-productive. If the team is on the same page and everyone is ready to tackle the tasks of the day, spend a short period re-grouping so that the team can get on and complete their assignments. There’s no need to spend hours planning and reviewing.

10 am: Meetings, meetings, meetings
More than one project manager will be  more than likely  in the office  and they will all need to work together for the benefit of the programme. This is why meetings with other managers and higher ups are necessary in a project manager’s day.

Meetings allow each project manager to go through the status of their respective projects and to track the weekly schedule and other deadlines. It is also a time to address any business-critical tasks that might come up.

It’s worth considering that only 7% of communication is spoken. The other 93% is made up of tone (38%) and body language (55%). So although facts and figures are easily communicated via email, letter or phone, an actual discussion or negotiation is best handled where you can see the other person and therefore are able to see for yourself what their tone and body have to say on the matter.

10:30 am: Tackling the small stuff
Meetings will be on and off throughout the day for project managers, which is why it’s important to tackle the small tasks in between appointments. Small tasks include wrapping project reports, booking future meetings, answering correspondences with other colleagues, reviewing items and team reports among other things.

It’s also important to schedule post-mortem meetings with the project team  to review the success of  projects  in order  to apply any  lessons learnt to future projects.

11 am: Project kick-off meeting
When one project ends, another begins, which means it’s time for yet another project kick-off meeting. Kick-off meetings can take on various forms, depending on the type of business. However, they all share the same basic needs.

Every individual involved with the new project should be in attendance and have the latest version of project specifications in written form. As project manager, it might be wise to send this to team members several days before the kick-off meeting to ensure everyone has time to review.

During a kick-off meeting, it’s important to review the overall goals for the project, both commercial and technical details, break down functional requirements, and spend time for discussion and questions. By allowing team members to communicate questions and share ideas, it opens the lines of communication and may bring up potential concerns that might have been missed in the initial planning stages.

Conclude kick-off meetings with a definition of the next steps and be sure individuals are aware of deadlines and their assignments.

11:30 am: Reviewing project specs, budgets and scheduling submissions
Other important tasks to tackle in between meetings include reviewing specifications and budgets and schedules for future projects. If a project begins that day, now would be a good time to  apply the  finishing touches to the project documentation before presentation and approval.

When it comes to establishing project estimates and budgets, a project manager must bring all of his experience into play in order to create a realistic budget that includes wiggle room for factors such as project complexity, team experience and skill levels, stakeholders involvement, time needed, third-party services needed, and contingency allowances among many other things.

It’s Not Easy to Squeeze in a Lunch Break, but It’s Often Necessary for the Project Managers Health and Sanity

12 pm: Lunch
In the midst of the seeming chaos that is project management, be sure to fuel up for the rest of the day’s work. Lunch is also a great span of time to check in with team members to make sure they are still on target for later-day deadlines.

2 pm: Launching the next project
After digesting lunch, it’s time to launch the next project. Get the whole team ready to go live and present the project to the client and begin testing aspects of the project in a live environment. It’s a time to spot problems and address them and review schedules and deadlines and other project needs.

3 pm: Time for everything else
The final two hours in the office are spent addressing everything else on the project manager’s plate. A project manager must be good at multi-tasking and whatever duties couldn’t be accomplished throughout the day are reserved for the final hours. Most of the time, lower priority tasks are reserved for afternoon hours. These tasks could include project update meetings with various departments, logging finances, reviewing monthly project schedules, approving time sheets, writing weekly reports, sorting purchase orders and communicating with suppliers. There are so many other small to-do list items that project managers are responsible for, but are often overlooked.

Spending Time at the End of the Day as Well as the Beginning to Review and Plan Will Only Help You Succeed as a Project Manager

5 pm: Review the day, plan for tomorrow
Before heading home, review the day’s list and what’s been accomplished. Anything that has been added or was left unfinished should be scheduled for the next day or sometime throughout the week. Reflect on your team’s work and clear the email inbox. Use a filing system that makes sense for you and be ruthless about deleting stuff. The beauty of an empty inbox is a thing to behold. It is calming, peaceful and wonderful.

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The Hard Side of Change Management

Change management is an approach to transition individuals, teams, and organisations to a desired future state. For over three decades, academics, managers, and consultants, realising that transforming organisations is difficult, have avoided  the subject.

My Way or the Highway

Major organisational change is profoundly difficult because the structure, culture, and routines of companies  often reflect’s persistent and difficult-to-remove ways of working, which are resistant to radical change even as the environment of  organisations change.

What started out as a financial buzzword in the early nineties  has become fundamental business practice, with executives recognising the need to keep abreast  with the competition in a rapidly developing corporate new world.

Navigating  change

Globalisation and the constant innovation of technology result in a constantly evolving business environment. There is an ever-increasing need for Change Management Lead’s / Senior Managers who can help organisations successfully navigate change in today’s business environments. The focus of this movement to date has been on how to  partner with organisations to define education, training and communication platforms that help to support the change initiatives and concerns of company employees. The critical aspect is a company’s ability to win the buy-in of their organisation’s employees on the change initiative.

While a project team is important for success, a senior level advisor is invaluable and can work  with an organisations  leadership team to avoid common pitfalls that change management projects often fall into. There are four key areas where an Advisor should act as this resource as follows:

1. Defining A  Strategy  

Executives should start by asking themselves  what exactly needs  changing and why? Organisational change directly affects all departments from entry level employees to senior management and  must be aligned to a  companies  strategy. Too many programs are heavy on the jargon and light on the substance.  Executives are often sold on an idea only to realise as the change initiative begins that they need a different outcome, tool or process to be successful.

In this situation the strategy for change needs to be re-aligned with the organisation and its goals.

An outside senior advisor with a unique perspective of the organisation will  play an important role in helping an executive to explore and shape the strategy they are defining and highlight whether it will truly create the outcomes they desire. This upfront partnership can save money  on the back end of a project, by avoiding costly re-scoping of initiatives.This relationship  between senior advisor and executive should therefore begin as early as possible in the process.

2. Coalition Building

Its important to give  people multiple opportunities to share concerns, ask questions, and offer ideas  and to make following up with answers and updates a top priority.  Executives must reach out across their functional work streams to build a large cohesive team to support the project once the correct strategy has been set and the urgency for the project has been established. A good senior advisor will be able to guide an executive though these interactions.

As a senior change management professional, it is important that you help leaders of the organisation craft the correct message. While leaders often know what it is they want and see the urgency for themselves, the outside view that a coach provides can support the development of a team around the initiative and  help to navigate the strategic and political interests in linking the change to the interest of multiple team members.

The more people are involved in the process, the fewer will  be acting as internal saboteurs.

Communication Is Key to Successful Change Management

3. Communication

Don’t confuse process visioning, planning and endless powerpoint presentations with communication.  

Change is uncomfortable, and adapting to change is messy. A  Gantt chart can not capture  the  hard side of  change management. Why? Because tasks are easy to list, but behaviour and long-held habits are not easy to change. Gather outside information, solicit perspectives, and adapt the approaches for your organisation and group.

The importance of communication within an organisation around the change cannot be underestimated.     Executives often fall short on communication in two main  areas, not communicating the right message and not communicating it frequently enough across an  organisation. It is often thought that everyone else in the organisation is on board and understands the change, however, the  reality for an executive  is not the reality for another worker who may have lost a job because of a well intended change initiative.  A senior advisor can apply consistent pressure to the leader of the change around the need for communication and its messaging.

Quantity Is Fine, but Quality and Consistency Are Crucial

4. Share  Relevant  Information Quickly

Most CEOs and managers are quoted as saying, “You can’t communicate too much,” Part of the communication will be the support the urgency in messaging.     “My way or the highway”  is often used, but is not an effective communication strategy.     Senior Advisors can work with executives to tailor their message to each area of the organisation in order to define content that is important to them.

A study by  Towers Watson  shows that “only two-thirds (68%) of senior managers say they are getting the message about the reasons behind major organisational decisions. Below the senior management level, the message dwindles further  to  (53%) of middle managers and 40% of first-line supervisors understanding  reasons behind major organisational  change.

The forwarding and cascading of information does not work as  consistent communication around the change will be necessary at all levels of the organisation using a variety of communication pathways and vehicles.  As a trusted advisor it is important to encourage executives to lead by example in both their messaging and communication of the change  agenda.

Only 25% of Change Management Initiatives Are Successful over the Long Term

Maintaining The Change

Many leaders and managers underestimate the length of time required by a change cycle. It is paramount  that as the  change effort reaches its completion that  leaders of the change recognise that the process does not end there.   The role of a Senior Advisor will be to guide them to the idea that work must be undertaken  to maintain the change over time. Maintaining change does not mean that an executive must own the initiative  forever, just that they take the necessary steps to ensure that change has a lasting impact by integrating the change into the corporate culture and measuring the benefits  and highlighting areas for future improvements.

The outside unbiased view is  that a Change Management Lead is crucial to the success of a change management program.

This article  provides food for thought rather than counsel specifically designed to meet the needs of your organisation or situation.  Please use it mindfully.

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4 Lies about Procurement You Probably Believe

The world of Procurement is seemingly full of impassioned people absolutely certain about what procurement is all about. Like other great lies, many of these half-truths and misleading ideas sound agreeable to the ears and come packaged as good advice from influential people.

How many of these popular lies have you fallen victim to?

1. Procurement should have a seat at the C-table

It’s not so much an outright lie as an irritating half-truth – but the damage comes with what Procurement people do with it. The thought behind this is well-intended: Procurement people should be able to speak the language of senior executives as easily as they can talk about FIDIC or demand forecasting. Terms such as EBITDA, ROIC, and economic profit should be part of their everyday parlance. Procurement issues are often the least understood by the board and the CEO and must be explained in their language.

What on earth could be wrong with that?   Nothing – if the Procurement people have full cognisance of their own tools and language – and can be persuasive to senior people of the value of Procurement.  

Now, that’s where we have, what is kindly referred to, as a skills gap.

In reality, for Procurement with no reputation (outside of that pesky metric of cost) and few business-aligned projects to call upon, it can be incredibly hard to try and catch senior people’s ear – never mind a C-seat (see what I did there?).

2. You must carry out a competitive tender to obtain value for money

I’m trying to distance myself from the public sector here (noting I did co-author the CIPS book on contracting in the public sector) but even in the private sector there’s a desperate need to get three quotes.  

Why three quotes?  

Not five, not 11?   ‘Cos the rules say three; that’s why.  

And the rules of Procurement policy and procedures, well, they can’t be broken because the CFO or the head of internal audit (all very commercial animals?) will be down on Procurement like a ton of bricks.  

When the three quotes are received the following conversation occurs – the highest price is rejected – ‘they’re ripping us off’ followed by – and I love this one about the lowest price quotation – ‘the price is too low, they must have got the specification wrong’ – and the contract is awarded to the middle-priced one”¦.surely there’s a better way to deliver value for money?  

Perhaps starting with actually defining it!

3. Procurement is the only source of governance for 3rd party spend

Being the only source would suggest a 100%, right?  

I’d be amazed – and delighted – if Procurement governed half of all the 3rd party spend.   Words such as ‘influencing’ are sometimes bandied about to shore up this lie. What a surprise that sales people are either trained, or very quickly learn ways, to actually bypass Procurement when selling.

And the reason?

Obviously marketing, IT, auditors fees, construction/property, recruitment (I could go on) is completely different, say the senior people in those departments – echoing the views of the oh so helpful sales people.   And Procurement just never gets near, as they can’t articulate (deliver?) the value they can add.  

I await the avalanche of people commenting on this telling me I’m wrong.   Please be assured you are exceptional in Procurement.    

4. Procurement welcome innovation and strategic relationships and anything other than lower price

Few businesses view Procurement as a strategic process. Most often, Procurement staff report to the CFO. This astonishing trend indicates that Procurement is still viewed as a financial / accounting activity and not an operational strategic activity that directly impacts the bottom line.

Suppliers; if you have an innovative product or service, recognise that Procurement’s ‘raison d’être’ is to deliver cost savings.   That’s what they are measured on, that’s what the research with CPOs and the C-suite say is the #1 priority.   There’s oodles of other priorities such as local sourcing, sustainability, innovation, partnering, risk management – I could go on and on and on.   But that’s the one they get measured on. Think that through, next time you’re pitching.    

The take-away

Perspectives on Procurement need to change, mature and grow up.  Lies like these need to be re-evaluated and abandoned. Procurement needs to change the way they engage and manage suppliers and their internal stakeholders; ‘adding value’ (a dreadful phrase!) means so much more than asking for a discount.

Stephen Ashcroft BEng MSc MCIPS (speaking here, very much in a personal capacity!) is Associate Director, Procurement and Commercial Advisory at AECOM, a Fortune 500 company. He’s a procurement learner stuck in the body of a procurement veteran, and with over 20 years’ experience still sees the glass as half full. Working with leading organisations across diverse industry sectors, Steve helps clients reimagine procurement to drive improved performance. A recognised advisor, speaker, lecturer, and author; the ever-hopeful Kopite shares his bright-eyed/world-weary views on Twitter @ThinkProcure, LinkedIn and his blog.

 

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