Today’s eSourcing Wiki-Wednesday topic outlines the many roles and responsibilities associated with being a successful sourcing professional. One of those roles is to provide ‘deep domain expertise’:
Management, members of the individual procurement organizations, and stakeholders will all expect the procurement professionals in the center of excellence to have deep domain expertise, especially in strategic categories.
I don’t question that corporate management and stakeholders expect procurement to have just as much knowledge about cardboard packaging as fuel or marketing services. I do question whether staffing a procurement group with enough people and teams to cover all major categories of expertise is a worthwhile investment.
I have worked on both sides of this choice, as a member of a specialized services category team and as a consultant in an organization where the right combination of process knowledge and category research was considered sufficient. My preference between the two models takes into consideration effectiveness, efficiency, and professional gratification. I would always vote for a process-driven organization.
As companies of all sizes ask themselves whether they need to keep the procurement function directly on staff, allowing a relatively small group of motivated professionals to cover a wide range of categories is an efficient approach. There is also a talent-management upside to allowing each procurement team member to take on a variety of categories. Every type of supplier or pricing model presents an opportunity to learn, and to apply those learnings to other categories. Besides, how long can any one team member really stand to source the many varieties of office supplies (stationary, paper, copier services, etc.) that every company needs?
Even the “strategic categories” mentioned at the end of the quote from the eSourcing Wiki may not require a dedicated resource. And categories of spend that do require a full time resource may in actuality be operational positions, whether they report into procurement or not.
In last week’s featured webinar notes, we heard Clorox describe their rationale for working with Procurian (formerly ICG Commerce) to get the right distribution of category expertise without bringing a huge team in house permanently. They made the decision to work with a third party in the centralization/building phase of their procurement journey. I wonder if they would have made the decision if they already had a large category-based team in house and were faced with the need to downsize.
As I said, my preference for the process-based model is in large part selfish – I always enjoyed starting a sourcing process for a category of spend I had not encountered before. Having a position that allows procurement to interact with a variety of departments in their own company may shape their skills in such a way that the team is able to meet or surpass the expectations of management and stakeholders, with or without that deep domain extertise.
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