2009 Edition 1

The PSD newsletter for
Purchasing Matters


                             Over-licensed and
If like m...

Recruitment best practice
– a CPO’s view

Having attended numerous interviews whilst sourcing talent ...

                              Preparation is key for
                              recruitment succes...

Is having a retained
procurement department
really necessary?
Often, within the sections of the Procure...
Which recruitment                                                                                      PSD
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Purchasing in Focus


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Purchasing In Focus Newsletter 2009 from PSD

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Purchasing in Focus

  1. 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. 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. 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. 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. 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. 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