Sales v Procurement

I attended a training course yesterday called “Get Your Customers to Spend More – Sales Process Workshop”. I have designed and implemented a number of processes over the years but most have been related to procurement, either in sourcing or purchase to pay. As a procurement professional, I was interested to learn more about the approach used by the people on the other side of the table. Here’s a brief summary of the similarities and differences:

  • Successful sales and procurement people follow robust processes
  • The sales process has more emphasis on contacts while the procurement process has more emphasis on transparency
  • Data is critical to understanding effectiveness
  • The sales process has a higher attrition rate ie a lot of people get involved at the start of the process but a few make a purchase and reach the end
  • There is a wide range of systems available to help manage the process, from MS Excel spreadsheets to sophisticated enterprise solutions
  • The sales process is more costly

I think the similarities could be applied to almost any area of business. The differences, on the other hand, show a different mindset. As the procurement profession continues to mature, the ability to be able to understand how to “sell” the benefits becomes more important.


In procurement circles, the term “maverick” often has negative connotations. It is used to refer to individuals who lack an understanding of existing agreements and are unwilling to follow the establish process. It is also used to refer the categories of spend that is not controlled.

A recent study by the London School of Economics and Political Science and the University of New South Wales in Australia has taken a different view. Their study of over 450 workers found mavericks were more inclined to be extroverts and poor team players but more likely to take risks. These attributes mean that they have a greater ability to develop innovative and creative ideas that help their firms to be “aggressive and competitive in the global marketplace”.

I have written about innovation on a number of occasions, most recently in Supply Management in January, and have suggested different ways to harness the creativeness of procurement teams and the wider supply base. This research highlights the need to develop programmes that draw in individuals who are not aligned to the established ways of working and to create an environment where they can share and develop their ideas.

Is George Osborne’s third budget good for procurement?

Consumer confidence has not responded well to the budget. Which?, the consumer champion conducted a poll asking the public whether they would be better off after this budget. One in three people said they would find it more difficult to pay for day-to-day essentials following the budget. 64 per cent of people said their confidence in the economy is unchanged or worsened. This news will not encourage suppliers that are thinking of investing in new and improved products and is not dramatic enough to lead to heavy price discounting.

The decision not to further defer the planned increase to fuel duty will add to many businesses’ pain. Buyers can expect to see requests for price increases as suppliers with high transport costs seek to pass on the increase.

On a more positive note, the Chancellor wants to put private capital at the heart of the big infrastructure projects. This should benefit the economy although it won’t be felt for a long time and buyers are unlikely to feel any effect. On the other hand, the cut in corporation tax from 26% to 24% next month will have an immediate impact as companies consider investing more in the UK.

Overall, I’m pleased to see that the Chancellor has resisted calls to spend money he didn’t have and has stuck to his guns and delivered a fiscally neutral budget. In general, I think it is a good budget for procurement. Unfortunately, this is no time to celebrate as excise duties on alcohol increase by 2% beyond the rate of inflation.

Governance and procurement

There’s been a lot in the press recently about the natural resources sector, from the £57bn megamerger of commodity trader Glencore and the mining company Xstrata to the family feud over a trust fund controlled by Gina Rinehart’s, heiress of Hancock Prospecting. There are a couple of other stories that haven’t received as much attention but highlight the importance of governance in procurement. The first is about Bumi, the British based natural resources group listed on the London Stock Exchange that has the largest coal-producing assets in Indonesia. Like CHC’s current client, ENRC, Bumi is the marriage of British finance and faraway resources. Bumi’s share price is down by two-fifths from a year ago. Nat Rothschild,  co-chairman has recently called for a “cleaning up” of the “balance sheet and corporate culture”. Second, the report that four buyers have been found guilty last month of taking bungs. The men worked for companies who acted as purchasing agents for oil and gas engineering projects and conspired to take bribes from bidders in exchange for insider information about contracts worth £66m in Iran, Egypt, Russia, Singapore and Abu Dhabi. These reports demonstrate that high levels of governance are essential in procurement, particularly when the organisation is stretched over a large geographical area.

More on Supply Management – back to basics

The article in Supply Management called “Back to Basics” has received a number of “Likes” and generated some interesting comments through LinkedIn. Frank Gesoff said it was an “interesting article” and that there are “lots of opportunities, if you know where to look!” Mike Duran also found it interesting and raised some valid concerns about protecting the intellectual property right. I’m glad you found it interesting and thanks for your comments!

Supply Management – back to basics

In May last year I wrote about frugal innovation. This was picked up by Rebecca Ellinor, the Managing Editor of Supply Management. After further research this developed into a feature article which has just been published. Click on the link below and have a look.

More on CPO Agenda – how procurement can add value to a merger

The article in CPO Agenda called “How procurement can add value to a merger” has received positive feedback from readers.

Michael Caddick, Managing Director at Caddick Consultants got in touch with the editor to say how much he had enjoyed the piece.

There has been some interesting comments through LinkedIn. Yi Chi, Vendor Relations Manager at TD Bank Group in Toronto, read the article and said that she had been given a role in a newly created post-merger procurement function which cuts across sectors and borders. It requires her to advance the organisations awareness of procurement, improve people skills, increase collaboration across functions, improve understanding of value chain, compliances and regulations in different countries which are influenced by macro-economics and public sectors. I thought this role was interesting because post-merger integration (PMI) for most procurement functions focuses on objectives related to finance and process. But PMI is a subset of change management. It’s been shown time and again that successful change management projects start and finish by considering people so it follows that PMI should do the same. By looking at organisation awareness, people skills and collaboration across functions I think Yi’ focusing on areas that we drive sustainable value in the long term.

CPO Agenda – how procurement can add value to a merger

Rima Evans at CPO Agenda asked me how procurement can add value to a merger. Follow the link below and read the results.

CPO Agenda

Buying Just Like The Ancient Greeks

I was asked to review a book by Paul Snell at Supply Management.  The book is called Buying Just Like the Ancient Greeks by Bob Soames (Buy Research Publications, £12.50). If you’d like to read my review then follow the like below:

Buying Just Like the Ancient Greeks, Bob Soames, Buy Research Publications, £12.50


CHC is pleased to announce that it has been awarded a contract to work with ENRC, a leading global mining company. ENRC has grown rapidly through acquisition since it was listed on the London stock exchange in 2008. CHC will be helping ENRC develop its procurement capability and standardise processes across its businesses in Europe, Central Asia, Africa and South America.

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