Getting senior management to buy into procurement.
We don’t often write about procurement on our Careers blog. Yet we carry senior level procurement and purchasing jobs on a regular basis and are acutely aware that it is a profession that is growing in importance. With Brexit looming, with all that implies for changes to EU-wide purchasing and standards, it seemed like a good time to interview someone at the top of the profession.
Fabienne Lesbros is Chief Procurement Officer at the Co-op Group (Retail, General Insurance, Funeralcare and Legal Services), with responsibility for a spend of circa £2 billion and a former winner of the CIPS Procurement & Supply Chain professional of the year. She joined the Co-op 2 years ago and is one of the key individuals who worked on the turnaround of the Group as part of the “Rebuild” senior management team. It seemed appropriate therefore to begin with a pretty fundamental question…
What does procurement do for a business?
“Procurement provides ways for businesses to add to their bottom line by providing commercial solutions. It sits at the junction of operations/product/market.
“It is the only function which accesses all internal data relevant to a business, (as it touches all parts of the business), and combines it with external data (market data is being used/received on a daily basis). Procurement turns this data into commercial solutions: we are interpreters, essentially we give data meaning.
“Procurement plays a big part in the overall strategy as it helps the business understand what impacts the wider economy and technological changes will bring and how to navigate them.
“The impact of procurement on organisations is what I call the 3 “Cs”: Contribute, Control, Cut. We contribute to the profit margin by creating deals based on market knowledge and innovation. We control costs by controlling spend through platforms/systems. We cut unwanted costs which then helps businesses re-invest in what is truly needed.”
Is technology playing an increasing role in procurement?
“There has been a lot of hype about big data, artificial intelligence and robotics. Six months ago I’d have said that knowledge/discussion of all the above was a bit ‘blurry’, but now there is more clarity around what is becoming available and things are starting to change quickly.
“Analytics and insights are better and make us more efficient and effective. The ability to gather far more data and then compare massive data-sets and analyse them, again faster, means that we have far better information on which to base business decisions. This gives far more flexibility to the stakeholders too.
“The other key area where technology will make a big difference is in the use of algorithms. These will impact on repetitive tasks, setting up alerts and using machine learning to free up buyers’ time to become more commercially aware and more strategic.
“Really good data and really good systems will guarantee the fastest access to market and respond to the demands of consumers/customers. Sourcing and supplier management will be where technology will help.”
Given that much of our procurement legislation comes from the EU, what difference will Brexit make to the profession?
“Going forward, companies will have to specify whether they are providing an EU standard/specification or not. How the EU standard will change post-Brexit remains to be seen. In the short term, it’s unlikely there will be much change, but what happens subsequently will be very important. Do we set up new UK standards or align ourselves with the EU standards in the future? How will UK standards be seen across the rest of the world? Questions will be raised around which tariffs apply, and for which jurisdiction the contract is under. It’s vital that procurement keeps abreast of all the changes as we go through the process and emerge on the other side.
“We also need to be mindful that as we change, Europe will change too. What were prevailing standards will change therefore we need to be able to respond. On a practical, day-to-day basis, this means we are already asking questions to suppliers with pan-European supply chains about any potential risks.”
What’s your favourite question to ask candidates at interview?
“I am looking for candidates who have both a desire for innovation and change in addition to an interest in commerciality – I ask them what their vision of procurement is. I am looking for them to describe what they see as commercial and technological touch points.”
Is procurement well perceived at board level?
“There is a lack of knowledge about what procurement can do or how it can contribute to the commerciality of an organisation.
Some boards have “seen” great procurement and really understand how procurement can contribute to revenue generation. Others have not and it is about painting a clear picture to make them understand the potential of the procurement function.
“Sometimes CPOS have to work harder on a board as they are not recognised as a licensed/chartered profession like a chartered accountant for example. Licensing of the profession is a must for the future.
“Currently anyone in an organisation can buy with or without procurement qualifications. Badly done, this can have considerable negative impacts on a business. Commercial deals need to be created and conducted in the right way, ensuring ethical sourcing policies are met and we are compliant with bribery legislation, and that there are no slavery practices in the supply chain. All this will affect corporate responsibility, corporate reputation or worse harm the reputation of a brand.
“We need to get the message out that procurement is a commercial function. And as much a strategic function as an operational one. Run by someone innovative with systemic ideas, it becomes part of the heart of the business.
“Procurement is a great career path for all levels. The opportunities for procurement professionals and CPOS in organisations are much better than people currently believe: primarily because procurement holds the information and data necessary to make important business decisions; but also for procurement professionals to be successful they have to master a very wide range of technical and soft skills.
“As we touch every area of the business and are the bridge between the internal and external world, we need to be innovative and drive the technology to improve business efficiencies. As that happens, our influence at Senior Executive level and throughout the business will grow and be recognised. The most successful companies have understood the impact of procurement and are already reaping the benefits.”
Chief Procurement Officer