Archive: September, 2017

Step down from your ivory tower

Academic and consultancy research seems to be pre-occupied by the question of whether procurement’s success within a company is a function of organisational status or strategic alignment. Some of it offers interesting insights into changes in procurement but a lot of it is irrelevant.

Some research argues that procurement should work towards getting greater recognition by the business. This feels a bit like asking for respect without having earned it. Furthermore, there is no evidence that procurement performance is related to status.

Strategic alignment is the term used when the procurement strategy is derived from and aligned to the company strategy. This assumes that the company strategy is clear and that everyone is executing it properly. In practice, there are many factors to consider when developing sourcing strategies and some categories of spend are simply not strategically important for the company.

The article called Procurement at a Crossroads – Disrupt or be Disrupted by Soren Vammen, CEO of The Danish Purchasing & Logistics Forum and Lars Bjerregaard Mikkelsen, Professor at Aarhus University, is a case in point. Ironically they argue that procurement should be “more relevant to their organisations”. At no point do they consider factors that limit procurement’s effectiveness such as poor data or inadequate systems. It’s almost as if they’ve never run a sourcing process.

If this type of research is going to have any value then it must be based on a genuine understanding of the challenges facing procurement professionals and good empirical data. Many academics in this field would be well served by adopting Peter Drucker’s approach when he admitted that “My greatest strength as a consultant is to be ignorant and ask a few questions.”