The war for procurement talent

Talented people tend to make above average contributions to any organisation. Every good business has talented and motivated people at its heart, the question is how to get the best procurement talent engaged and motivated within your business?

When looking to attract talented individuals we must ensure that the purchasing challenge presented to the candidates is BIG and NEW. Eiffel was not attracted by the opportunity to design houses, nor Einstein passionate about repeating what others had already done. Great talent is drawn to the opportunity to work on big things and to apply new thinking.

Assume that you can attract the best talent into your organisation, because of the size and freshness of the opportunity you can present to candidates, how do you intend to keep them? The answer is to ensure your business has the capacity to change. Firstly, talented people need to be successful. If they are not successful they will want to change something around them to ensure that they will be in the future. Change creates the opportunities that talented people can exploit in pursuit of success. One only has to look at the impact of the opening of China's borders to trade to appreciate the opportunities that change creates. Secondly, change is essential to nurture experience and knowledge. Talented people are usually motivated when on the steep part of the learning curve and this is only possible if they are constantly being presented with change.

So, within your current purchasing function, how big is the task and what scope exists to change the purchasing approach and the purchased items themselves? If you are able to advertise that your biggest category of spend is worth millions, and that you expect this category to step change your business's performance, then the talent that you are looking for will probably step forward. But what happens if the category is not very big?

In general if the total spend portfolio is subjected to a classical Pareto analysis, the larger and strategically important areas of spend, the A class items, usually attract the attention of the best in-house, or external talent. Interestingly, this migration of the best talent within your business to the greatest areas of spend whilst in one way sensible, exacerbates the problem of what should you do with the smaller categories of spend. Interestingly, in many companies the greatest cost reduction or value improvement opportunities now exist within the area of spend labelled as "B Class" items. When talented purchasers have brought new thinking to this class of spend the average cost benefits have been measured at 26%!

One way to attract the best talent into your B class items is to aggregate the task of procuring them with other companies. For example, you may buy only a few hundred thousand euros worth of turned components, which of themselves may be uninteresting to a high calibre individual and not worth applying a rigorous category management process to. However, if the opportunity is to apply the latest category management thinking to these parts along with similar items from a dozen other companies the challenge becomes much greater. Since the approach creates large categories of spend as well as being new and exciting the ability to attract the best talent is greatly enhanced. Furthermore, given the magnitude and complexity of the aggregated category, subsets of the total category will be involved in frequent tenders providing a constant flow of market data which is vital for a category manager to know what is going on in the global supply market.

In summary, internal expertise and talent will and should be allowed to migrate to the larger and most sensitive areas of spend and not be distracted with smaller categories. This enables people to develop and provides them with sufficient opportunity to create successes for themselves and the business. For smaller areas of spend, and for smaller businesses, the use of an external purchasing organisation such as Vendigital will significantly enhance the contribution that smaller categories of spend provide. This is because their role in aggregating the category management requirements from multiple companies creates the challenge and environment to attract and retain the highest calibre procurement talent.

Adrian Griffiths is a co-founder of Vendigital.