Purchasing In Focus Newsletter 2009 from PSD

1. 2009 Edition 1
The PSD newsletter for
Purchasing Matters
PurchasinginFocus
Welcome to PSD’s latest edition of Purchasing in Focus for October 2009. We hope you enjoy
the new format and design which will hopefully stimulate thought and debate across the
purchasing community.
2009 has been both an interesting and challenging year for recruitment into the procurement
sector. PSD has risen to this challenge by providing clients and candidates with a tailored and
efficient service which maintains our high standards of customer service through these turbulent
times. We have worked on a number of interesting assignments both in the public and private
sector and we are beginning to see some very positive signs that the market is improving. Our
aim is to continue to support you by providing a professional recruitment service which
surpasses expectations. If you are a client who is seeking to hire or a candidate who is
considering your next move, I look forward to helping you achieve your goals.
Our sincere thanks go to Phil Marsh, Steve Elliott, Caroline Stafford and David Sinclair who have
CHRISTIAN SHAWCROSS contributed to this issue. If you would like to contribute to the next Purchasing in Focus then
Managing Consultant, PSD please email me at christian.shawcross@psdgroup.com or call me on 0161 234 0331. I do hope
christian.shawcross@psdgroup.com
you enjoy reading Purchasing in Focus.
Stephen Fletcher Stuart Walters Paul McIntyre Cara Regan Marsha Barsky Andrew Moran
Director Principal Consultant Principal Consultant Senior Consultant Senior Consultant Consultant
Stephen has a wealth of Stuart is a Principal Paul focuses on the Cara joined the PSD Group Marsha joined PSD in 2006 Andrew Moran focuses on
recruitment experience with Consultant within the Technology and Broadcast over three years ago and and specialises in the the Energy and Utilities, Oil
over 20 years of service Purchasing Team and has Media sectors. He has over has nine years’ recruitment property and FM sectors. and Gas and Transportation
gained at PSD. He has over ten years of ten years’ experience in experience. Cara focuses Prior to PSD she was the sectors on a nationwide
worked across a number of recruitment experience. recruitment specifically in on the not-for-profit and Marketing Manager for level. Andrew has worked
disciplines and now heads A law graduate, Stuart procurement and supply property sectors. By Land Securities plc. Marsha with a number of key
up the purchasing and joined PSD in 2003 and set chain. Before working exclusively recruiting in this has completed several clients within these sectors
supply chain function. He up the highly successful for PSD, Paul worked area she is able to provide successful placements and has an excellent
focuses on recruitment into Purchasing interim team. for a specialist Freight clients and candidates with with Blue Chip clients. She network of professional
the Financial Services and He has developed an Forwarding recruitment a specialist service tailored graduated in 2003 with a talent at his disposal. He
Business Services sectors. extensive network of consultancy. Paul to their exact requirements. degree in Media, Culture has worked with PSD for
stephen.fletcher@psdgroup.com contacts in the Procurement graduated in 1990 with Graduated in 1998 with a and Society. two years.
interim market. a BSc (Hons) Geography. BSc (Hons) in Psychology. marsha.barsky@psdgroup.com andrew.moran@psdgroup.com
stuart.walters@psdgroup.com paul.mcintyre@psdgroup.com cara.regan@psdgroup.com
PSD is an international PSD PSD PSD PSD Other Office
recruitment services London Birmingham Manchester Haywards Heath Locations
organisation operating
at the Middle to Senior 28 Essex Street 85-89 Colmore Row 2nd Floor 7 Perrymount Road
Executive level. London Birmingham Abbey House Haywards Heath Frankfurt
WC2R 3AT B3 2BB 74 Mosley Street West Sussex
We offer expert knowledge Manchester RH16 3TN Munich
of our specialist markets: M2 3LW Paris
Technology, IT, Finance &
Banking, Marketing & Sales, +44 (0)20 7970 9700 +44 (0)121 212 0099 +44 (0)161 234 0300 +44 (0)1293 802000 Hong Kong
Property & Construction, london@ birmingham@ manchester@ haywardsheath@
Customer Contact, Law, psdgroup.com psdgroup.com psdgroup.com psdgroup.com Shanghai
HR and Purchasing.

2. PurchasinginFocus
Over-licensed and
over-supported?
If like many organisations right now, your organisation has
considerably downsized, you may have agreements that
were entered into as little as one or two years ago for software
licenses and support, that could be operating at an ‘over-licensed
and over-supported’ level. By this I mean you now have too many
licenses, on which you are paying support.
You may have the ability to de-support some
of these licenses to achieve a saving for your
organisation. Before you engage the Supplier
to discuss this, there are a number of matters
to look into and possible obstacles to consider.
Make sure you understand the current usage,
usage forecasts, products licensed that are
not in use at all and not likely to be, and how
dependant you are on this Supplier’s products
(most organisations become heavily dependant
upon software products, which underpin key
applications).
Review relevant contracts with your Legal
department to establish what contractual
provisions are in place to help you achieve
your objective. Be mindful that, in some cases;
Suppliers incorporate documentation, policies
and other variances by reference only. It is
for this reason that organisations should be
concerned, as these policies, and other
documents can be unilaterally changed
without consultation or notice.
If you are unable to reach agreement with the If you still feel strongly about your right to
Also ensure you appreciate the total contract Supplier for a partial termination, and along de-support in part, and have a strong argument
portfolio you have with the Supplier, the type with Legal you believe you have a good case to back this up, you could move to Mediation.
of relationship you have today, and the one to pursue the matter further. You could invoke There are no courts involved, just you,
you want to maintain or develop in the future. Dispute Resolution. your representatives, the Supplier, their
If you issue notice to the supplier, for support representatives, and a Mediator, who has some
This matter cannot be dealt with in isolation experience in the subject matter under dispute.
in part, you may well find that they refuse to of the overall relationship with the Supplier.
acknowledge your right to terminate support Although your organisation may be downsizing In my experience, this method of resolution is
for licenses in part. While your focus maybe in terms of its business, it will have a a very effective and unemotional method of
to reduce the run rate of certain software. The considerable dependence upon the Supplier resolving disputes. It can often remove the
Suppliers focus will be to maintain the revenue for the immediate future and you should emotion and frustration that is sometimes
stream, or indeed increase it. The Supplier may therefore aim to move to an arrangement experienced during direct discussions with a
seek to do this by suggesting a renegotiation of that enables you to build for the future. Supplier when you have reached loggerheads.
the contract. This may lead to an extension of
the term, introduction of a lower discount, and In a Dispute situation, the Supplier is likely to Caroline Stafford
other factors might also change, e.g. the basis maintain the line “renegotiating the contract is Head of Sourcing, EMEA
on which the software is licensed (transitional the only way to resolve this”. In some cases BNY Mellon
hits, number of full time employees, named this will be true. However, if you are de-
user, processing power capability etc.). This supporting all licenses for specific product,
approach may require out of budget funding, and as a result terminate your right to use the
which could be counter-productive. This of product, you have a stronger argument for a
course depends on your usage roadmap. rebate on support. That is not to say you have
a lesser argument if you de-support in part.
If you do renegotiate, it is crucial that all
historical provisions to be retained, are If ADR does not resolve the debate, you have
incorporated in the new Agreement. These three choices a) back-down and continue to
could be entitlements for software products, over pay on support b) agree to negotiate a
the way the product is installed and effectively new deal with the supplier c) move to
licensed. ‘Mediation’.

3. PurchasinginFocus
Recruitment best practice
– a CPO’s view
Having attended numerous interviews whilst sourcing talent for
my team, I feel I can offer some sound advice which can lead
to a greater success rate.
After identifying a need to recruit new talent an
Perfect
Planning
organisation must take care to ensure that the
job profile is clearly specified. Too often there is
ambiguity on what exactly is required. The right
people, working in the right environment, on
the right tasks will deliver success, so the job
profile must be sufficient in attracting these
individuals by creating a compelling value
proposition. Jargon should be avoided along
with over generalisation of the tasks that need
Prevents
Performance
to be accomplished. A straight taking job brief
will sell the organisation and should attract
straight talking candidates. Of course the
Poor
opposite is also true.
A key element of a procurement professional’s
portfolio is integrity. Successful recruitment
relies heavily on the integrity of all parties.
When producing the “Basics” i.e. a Job
Specification and an ideal candidate profile,
the organisation has to be careful that the
advertised position is valid, is a good fit with
the organisations future goals and will be In the case of the interim market, agencies will business as usual process which is fully
supported by key management. In today’s normally have a pool of interims on their books understood. Also, it’s an important exercise to
diverse interim and permanent supply market, that the agency has professionally appraised motivate employees and develop their existing
organisations can choose to employ an interim and can be matched to the client’s needs. skills and careers to meet the organisation’s
candidate where there is a specific short to This reduces the need for multiple interviews. strategic goals. The review process avoids
medium term task to be performed, or a organisations finding themselves in a fire
In the current economic climate organisations fighting position where a recruitment plan
permanent employee where there is a valid are keen to seek out those who can build lower
career opportunity. is rushed through to fill an unplanned gap.
cost platforms or deliver innovative competitive
An organisation’s failure to successfully advantages. Progressive organisations are Often for larger organisations such reviews
complete the basics will often lead to an competing for the best of the best in their quest throw up numerous new positions for fulfilment,
inappropriate candidate being selected. Most for a sustainable return on their investment. thereby giving the recruiter the ability to look
common in my experience is the scenario In addition to financial packages, organisations at a wider base of talent. This facilitates
where an opportunity has been oversold and should consider what else they have to offer benchmarking and allows more professionally
the reality is that the position advertised fails to professionals. considered appointments. In brief it’s
to meet the talented candidate’s expectations. employing the five P’s “Perfect, Planning,
People who take up a professional career are Prevents, Poor, Performance.”
Often the outcome is that the employee soon usually keen to develop their skills portfolio
moves onto another opportunity. Likewise, and organisations can capitalise on this need, Phil Marsh is the interim CPO for Steria.
candidates have a duty to perspective attracting talented candidates by offering a
employers to give a honest account of structured career development plans. Some Phil Marsh, Steria
themselves. That’s not to say that it’s candidates see these plans as soft benefits,
inappropriate to deliver a positive picture based but others value them as highly as the financial
on genuine experience. Most experienced package. If these benefits are offered, it’s
interviewers will be able to sort the wheat from imperative that employers follow through and
the chaff. If an organisation lacks experience deliver the plan not only to fulfil an employee’s
in this area of recruitment they can employ the aspirations, but to obtain maximum benefit to
services of professional agencies to screen the organisation.
candidates. References should be relevant to
the candidate’s experience and validated as Regular assessment of the existing talent pool
soon as possible to successfully close out the can help ensure that any external recruitment
recruitment process. is planned and professionally executed as a

4. PurchasinginFocus
Preparation is key for
recruitment success
Having recently carried out a number of recruitment processes
for clients, I have been surprised at the poor approach by some
candidates in interviews. Hopefully this article will serve as a
reminder to candidates and recruiters of some of the key points
to keep in mind when interviewing for a procurement role.
Preparation is critical. Often candidates
will carry out extensive research on the
organisation they are interviewing with but little
or none on themselves. Make sure you have at
least three key successes that you can recall
quickly, particularly, the best savings to date,
your best stakeholder challenge, your best
management challenge and how you overcame
any obstacles. Even if you failed in an area, the
key thing is to show you learned from it and
how you learned from it. Where possible try to
make them relevant to the role you are applying
for and they are on your C.V.
Make sure you can illustrate your
understanding of key procurement principles
from the basic Pareto Analysis through to
the-principles of category management,
e-procurement, spend analysis and strategic
sourcing and where possible relevant
experience to date. If you have not had
experience of something don’t just say “I have
no knowledge of it”. Instead, your response
could be “I have no experience however I
understand the theory and I am very keen to
experience it in practice”. This is much better.
practice and knowledge as possible. Quoting Be prepared to answer questions on your CV,
To build on that make sure you have a sound a current industry or thought leader or a recent particularly why you moved to certain jobs
knowledge of the principles of negotiation and relevant book never does any harm. and organisations and wherever possible show
influence. All too often when I ask candidates that there was some thought in your choice,
their definition of negotiation I get the text book Keep your training up-to-date. In today’s world a link or a wish to gain a certain experience or
answers of “two people coming together” and it is not acceptable to say that your last training work in a certain sector. It does not sound very
a “win-win scenario”. Ensure you can explain course was 10 years ago. Employers want to appealing to a prospective employer that you
the preparation process, the seven tools and know that you understand the latest concepts just took the first job you could get!
have at least two good examples of your and methods. This may be what makes the
negotiation success. difference between you getting the job or Finally be wary of headline statements on your
someone else. C.V such as expert negotiator or communicator.
Remember to always read “wildly and widely” This is really inviting a challenge from the
within procurement and expose your mind to If you have been unfortunate to have been out interviewer, and if you fail to live up to such
as much relevant and useful procurement of work for a while, don’t just moan on about a statement your credibility may have been
the state of the job market. Show that you have badly damaged.
taken a proactive and positive approach and
taken on self development whilst out of work, Steve Elliott
“Keep your training through study, reading, even voluntary Managing Director
procurement work. ProcurePro Limited
up-to-date. In today’s Remember to keep your answers clear,
world it is not concise, relevant and ensure articulate. If
the interviewer requires more information they
acceptable to say that will ask. Meandering answers will only cause
your last training course you to lose your train of thought and the
interviewer’s interest. Also, avoid saying “you
was 10 years ago.” know”, “obviously”, “liaise” and “responsible”
repeatedly as this will have the same effect..

5. PurchasinginFocus
Is having a retained
procurement department
really necessary?
Often, within the sections of the Procurement/Supply
Chain community there can be found a degree of
self reinforcement on the importance and status of
Procurement within their respective companies.
The rationale for having Procurement resides more radical options to address the legitimate Conclusion
within the following areas; ensuring commercial and necessary provision of Procurement
and contractual arrangements are structured related services. When determining your true Procurement
to reflect commercial interests of the company, needs and what will ultimately form the “best”
mitigation of risk, the need to ensure Removing the Procurement Department solution for your specific company
purchasing of goods and services are requirements there are a few qualifying
The repercussions of such an action entail questions worth considering:
co-ordinated for the best possible return on embedding responsibilities for cost control
expenditure and to ensure a constant focus directly within line management and ensuring 1. Does your existing Procurement organisation
upon management of cost. they have the tools and processes to undertake actually contribute directly to profit and revenue
There are a number of recurring issues buying. generation activity or is it primarily
encountered which curb the scope and role of administrative and transactional?
The advantages of this approach would be to
Procurement within many companies; ensure the responsibilities for cost and contract 2. Has your legacy procurement organisation
management remain firmly within the business constantly struggled to gain access into
• Procurement not actively engaged or specific areas of spend or business
involved with the revenue generating rather than sitting within areas of the business
who are not the end users or actual buyers of operations?
activities within the business.
goods and services. 3. Have the actual savings delivered been
• Procurement’s role is partially self limited due worth the effort expended? Could your
to a struggle to find and retain personnel Use of external Consultants/Contractors company have delivered roughly the same
possessing the requisite specialist skills (for Using external assistance may provide the outcomes through either use of external
example IT, Marketing, Legal Services, desired solution. Consultants or contractors are support or through getting the business to take
Telecoms experience ranks highly) particularly effective for undertaking discrete on these activities themselves?
• The CPO(Chief Procurement Office)/Head of defined activities, for example; 4. Does the inherent company culture and
Procurement reports into the CFO or board management behavior support the effective
• Implementation for a solution use of a procurement department or are there
level positions indirectly, their leadership role /software package
is further compounded by the following constant internal debates around the ways and
factors: • Driving rapid cost reduction initiatives means to gain acceptance and improve levels
of compliance?
– Overlapping responsibilities – line • Specialist expertise (IT, Marketing, Telecoms)
managers within the business who 5. Do the critical supplier relationships sit within
perceive budget and cost management to • Improving upon reporting capabilities the business or elsewhere within your company?
be “their” domain and responsibility The above options can offer some valuable 6. Do you and your senior management have
“horsepower” to get critical projects and the will and determination to drive higher levels
– Where there is limited appreciation for the of compliance across your company and invest
role of procurement this can be initiatives underway and to generate results
without having to undertake the investment in in the required personnel?
accompanied by a high turnover within
Procurement’s leadership maintaining permanent headcount or In summary not every Procurement department
establishing a procurement department. is aligned or engaged to the optimum – there
– A lack of real access or inclusion for comes a point in time when your management
Procurement in setting company strategy The downside of such an approach is
inconsistency of outcomes or approach has to reflect whether there is any true benefit in
– Overlapping roles and lack of clarity with however is the level of disruption and trying to “force” them onto a reluctant business
regards to the scope and activity across discontinuity really any worse than that caused or to look at innovative ways to enable the
these departments and within by incurring frequent changes of headcount or business to be the true master of cost control,
Procurement. constant restructuring? risk mitigation and contractual compliance.
– Procurement only actively engaged when Outsource of Procurement David Sinclair, Accenture
issues have reached an acute stage – i.e. UK Service Management Lead Supply Chain
contracts have been breached, licences Another option is to outsource procurement
miss-used or commercial terms require completely – often this decision is arrived at as
negotiating. a result of a failure to integrate procurement
across core activity within the company or from
Instead of continually trying to “fix it” their a financial and cost perspective.
senior management should consider other

6. Which recruitment PSD
Purchasing
service is best for & Supply
my requirement? Chain
PSD Purchasing and Supply Chain can provide Over the past 12 months the PSD
Purchasing and Supply Chain
a bespoke solution to your recruitment needs. team have worked in partnership
Collectively, we have over forty years of with a number of clients through
both retained and non retained
recruitment experience across the team. assignments, we have listed a
selection of clients below:
So what service can you offer me? Combined Search & Selection This is a very
thorough and effective process that combines BUPA LV
The answer is simple, we offer a range of both the advertised selection and executive
specific, tailored services. search processes. Aviva Wincanton
So what does that mean for our File Search (Contingency) We hold an News International EMAP
clients? extensive database of sector relevant Williams Lea Patton Air
candidates that provide a quick, effective and
Well, first of all our consultants have an expert immediate recruitment solution. NHS BSkyB
knowledge of all areas of procurement and
supply chain: from category manager up to Interim & Contracting PSD can also supply Carillion BP
CPO, and offer highly effective recruitment quality professionals on an interim/contract
basis. This provides a quick and very effective Abbot Laboratories Arup
skills that enable us to deliver outstanding
results and an exceptional level of service. We solution for a short-term assignment, specific Norgine GSM
provide a comprehensive range of recruitment project or contract position.
services aimed at the middle-to-senior Britannia Building Liberata
Dependent on the role, we will suggest one or a Society
executive level. Whether your task is to recruit a combination of these solutions to produce the Royal Bank of
number of individuals or to fill a single vacancy, best result for the client. Co-op Financial Scotland
PSD provide fast, efficient and effective Services
recruitment solutions. In addition to the above services we Legal and General
can also offer: Peel Ports
We offer the following services: Babcock
• Salary benchmarking Lloyds Banking
Executive Search PSD employs a research Group Steria
facility which tracks the careers of key • Extensive research facilities
professionals within its specialist markets. • Media response handling
From the initial briefing meeting, research
will be carried out to identify relevant • Competency based interviewing
professionals within the sector. Once the • Skilled screening and interviewing
client has approved the “longlist” of potential
candidates, confidential approaches are made, • Personality profiling/psychometric testing
explaining/selling the role. We then interview • Interview and conference facilities in
the candidates against an agreed set of London, Manchester, Birmingham
competencies and provide a shortlist of & Hayward’s Heath
c3 - 5 outstanding candidates. The client then
interviews the shortlisted individuals, offering So which service is best for my
the preferred candidate the role. PSD manages
the offer process and maintains close contact requirement?
with the candidate through to the start date. Each assignment we handle is unique, which is
Advertised Selection We are a major advertiser why we offer a broad range of services and will
in trade and national press (we are the UK’s advise on which is most suitable for you.
largest advertiser in the quality broadsheets by
some distance) and have a strong, distinctive
advertising style. Once the brief is taken we will
select the relevant media, copyright the advert
and handle the response. Interviews and
selection will take place followed by offer
management until the assignment is complete
(as in the process for Executive Search above).
www.psdgroup.com/purchasing