Today’s post is a continuation of our slowly developing series “Alternative Solutions for Staffing Procurement and Sourcing Positions” that we started a couple of months back. Today we’re discussing another alternative solution that can help fill the gaps in your procurement and sourcing groups. This post will talk about ways to maximize the use of newer, less experienced resources, training them to be experts and how to ensure that subject matter experts be more focused on delivering value to the organization rather than doing tactical work.
It is always a positive vibe to walk into an organization that has already recognized need and has already established a dedicated sourcing team. However, far too often do we see the structures of those teams constructed in a way that restricts the results that the team could produce under optimal conditions. More specifically, it’s not uncommon to see subject matter experts and category managers that are exclusively dedicated to a singular commodity (or spend category). These category managers tend to source their commodities very well, have learned the ins and outs of the bid process and negotiation levers, but don’t have a lot of time outside of their defined categories to get involved anywhere else or to help the organization on a broader level. While these SMEs might have some general templates and a common sourcing technology platform that they share across categories, the reality is most of them are disconnected from what other resources are doing in the company as a whole as well as other sourcing groups, and are often not taking advantage of resources appropriately in order to maximize efficiency and ultimate achieve savings targets faster.
I would call this type of company one that is stuck in “Category Manager Mentality”. It’s not entirely different than when you try to approach a new department who hasn’t yet adopted strategic sourcing (like HR or Marketing) and are told that you don’t understand the commodity, approach, history, uniqueness, and are basically told to go away. Category managers can often be just as bad, “sourcing our category is unique”, “we can’t use the standard process”, “I have too many other, bigger, projects going on, can’t get involved in a new one”. Being trapped in category-driven sourcing group is a horribly inefficient use of resources; and these types of businesses must change the way work is allocated and resources are utilized. In fact, as a consultant, we know there are often huge savings opportunities in sourcing groups that have become compartmentalized; as they frequently never go after the other 20-30% of spend that doesn’t fall within their category management structure.
What I’m speaking about here is moving to a shared services model, or a center of excellence. Instead of having a series of commodity managers exclusively in charge of managing spend in a singular commodity (IT, Marketing, Raw Materials, Indirects, etc), modern sourcing groups have a shared resource pool that maximizes the talents of individuals, develops new individuals, maximizes the efficiencies of the current resource pool, and ultimately allows you to achieve savings faster. This is how we do it in the consulting world. Everyone has a solid understanding of the process, tools, and sourcing model, but specialists are assigned at a task level. This means identifying the talents and skills of individuals, separating that from commodity subject matter expertise and sharing common resources to get the job done.
Training and Retaining
First, the bad news. According to a recent HBR study, high achievers that are on average 30 years old, have good work ethic and demonstrable work credentials leave employers on average after only 2.5 years. So why invest in someone who is just going to leave you after they learn, right?
Well, let’s look at the good news. According to Naseem Malik, Captain of Industry at MRA Global, these same workers tend to have fast growth and development, find multitasking easy, are able to be big-picture focused thinkers, value technology and are not intimidated by position or job title. In other words, they are the ideal candidates to take over the previously mentioned analysis and transactional activities.
It’s much easier to train new resources on how to use templates, conduct analysis, and follow a standardized procedure than it is in developing subject matter expertise that might walk out of the door as soon as it is learned. In fact, it’s an easy place to insert students and interns into the process; so you can test their skills while they test their career path (and your company).
I’m not saying that all new-hires should be locked into number crunching or drafting RFPs, but that is a good place to start. The confident self-starters will use the opportunity to improve on your processes, templates, spreadsheets. Let them! A fresh set of eyes to a tired way of doing things often can produce valuable results.
It’s not as easy of just pushing the grunt work downstream though. Keep in mind that these resources do want to grow, and don’t want to be locked to a cubicle running Excel macros for life. They will require constant feedback and direction and must feel that their contribution is meaningful to the business (such is the generalized characteristic of the millennials). In many cases, you’ll find them to be a bit needy.
On the other hand, the motivated ones will want to learn more, improve your company, and grow with your organization. This means, that with time, you introduce them to the strategic roles of your business, the category expertise that you have; and let them help you pick the direction of what their future will be in the business.
Get rid of those old structured HR manuals that walk people through outdated corporate culture and make sure your training programs are fluid. You may have to reinvent your training process, and even how your teams operate as a whole. As you’ve done with job functions; break the tactical (using tools and defined templates) trainings away from the strategic (personal, one-on-one, hands on, subject matter expertise). At the end of the day, you should be able to build a functional team that can handle more projects quickly, and that is able to better adjust workloads when an individual leaves unexpected. With more time and a little bit of empowerment, these learners will become the next leaders (and trainers) for your organization.
It is always a positive vibe to walk into an organization that has already recognized need and has already established a dedicated sourcing team. However, far too often do we see the structures of those teams constructed in a way that restricts the results that the team could produce under optimal conditions. More specifically, it’s not uncommon to see subject matter experts and category managers that are exclusively dedicated to a singular commodity (or spend category). These category managers tend to source their commodities very well, have learned the ins and outs of the bid process and negotiation levers, but don’t have a lot of time outside of their defined categories to get involved anywhere else or to help the organization on a broader level. While these SMEs might have some general templates and a common sourcing technology platform that they share across categories, the reality is most of them are disconnected from what other resources are doing in the company as a whole as well as other sourcing groups, and are often not taking advantage of resources appropriately in order to maximize efficiency and ultimate achieve savings targets faster.
I would call this type of company one that is stuck in “Category Manager Mentality”. It’s not entirely different than when you try to approach a new department who hasn’t yet adopted strategic sourcing (like HR or Marketing) and are told that you don’t understand the commodity, approach, history, uniqueness, and are basically told to go away. Category managers can often be just as bad, “sourcing our category is unique”, “we can’t use the standard process”, “I have too many other, bigger, projects going on, can’t get involved in a new one”. Being trapped in category-driven sourcing group is a horribly inefficient use of resources; and these types of businesses must change the way work is allocated and resources are utilized. In fact, as a consultant, we know there are often huge savings opportunities in sourcing groups that have become compartmentalized; as they frequently never go after the other 20-30% of spend that doesn’t fall within their category management structure.
What I’m speaking about here is moving to a shared services model, or a center of excellence. Instead of having a series of commodity managers exclusively in charge of managing spend in a singular commodity (IT, Marketing, Raw Materials, Indirects, etc), modern sourcing groups have a shared resource pool that maximizes the talents of individuals, develops new individuals, maximizes the efficiencies of the current resource pool, and ultimately allows you to achieve savings faster. This is how we do it in the consulting world. Everyone has a solid understanding of the process, tools, and sourcing model, but specialists are assigned at a task level. This means identifying the talents and skills of individuals, separating that from commodity subject matter expertise and sharing common resources to get the job done.
- Do you have an IT sourcing person who is a wiz at generating macros in Excel?
- Do you have a marketing sourcing SME who is incredibly organized and develops RFPs that have better than average response rates?
- Do you have an “old timer” who isn’t very tech savvy, but is a master in the art of the negotiation?
- Are you utilizing them to their fullest extent, or are these resources dedicated to a department or commodity and focused on achieving their individual targets?
Instead of locking people into a commodity, or a specific series of projects (with big contracts) each year; focus on understanding the individual talents of each person in your group and capitalizing on their strengths. Assign that negotiator a seat at every big negotiation (regardless of commodity area) to help lead the strategy, don’t burn precious hours of their time having them manipulate RFP response data in Excel when they’ll simply never be that quick at it. Utilize that IT commodity manager who is good at Excel and have each person explain the tasks that take too long to complete (like comparing multi-line item bids) and ask them to develop a solution. Learn why your marketing person writes good RFPs, or have them proof, edit and create the strategy/format for your next RFP in another department. Many companies are taking an approach of having one or two Subject Matter Experts for big-spend categories and using a shared resource pool of generalists (excel experts, writing experts, research experts) to get the job done.
The great thing about this model is that you don’t have to find high-cost (in-demand) procurement experts to get the work done. Any decent fresh out of school accounting major, economics, or statistics major can do you heavy lifting in analysis, and inexpensive journalism and composition majors can be used to draft your RFPs. There’s no need for an $80K, $100K, or $150K resource to be doing this type of work. Those expensive resources should be considered leaders. Their focus must be on strategy, reviewing work, delegating work and getting as many sourcing initiatives off the ground as possible. These leaders should be utilizing a team of tactical resources to do the heavy lifting. These tactical resources will become the learners.
Training and Retaining
First, the bad news. According to a recent HBR study, high achievers that are on average 30 years old, have good work ethic and demonstrable work credentials leave employers on average after only 2.5 years. So why invest in someone who is just going to leave you after they learn, right?
Well, let’s look at the good news. According to Naseem Malik, Captain of Industry at MRA Global, these same workers tend to have fast growth and development, find multitasking easy, are able to be big-picture focused thinkers, value technology and are not intimidated by position or job title. In other words, they are the ideal candidates to take over the previously mentioned analysis and transactional activities.
It’s much easier to train new resources on how to use templates, conduct analysis, and follow a standardized procedure than it is in developing subject matter expertise that might walk out of the door as soon as it is learned. In fact, it’s an easy place to insert students and interns into the process; so you can test their skills while they test their career path (and your company).
I’m not saying that all new-hires should be locked into number crunching or drafting RFPs, but that is a good place to start. The confident self-starters will use the opportunity to improve on your processes, templates, spreadsheets. Let them! A fresh set of eyes to a tired way of doing things often can produce valuable results.
It’s not as easy of just pushing the grunt work downstream though. Keep in mind that these resources do want to grow, and don’t want to be locked to a cubicle running Excel macros for life. They will require constant feedback and direction and must feel that their contribution is meaningful to the business (such is the generalized characteristic of the millennials). In many cases, you’ll find them to be a bit needy.
On the other hand, the motivated ones will want to learn more, improve your company, and grow with your organization. This means, that with time, you introduce them to the strategic roles of your business, the category expertise that you have; and let them help you pick the direction of what their future will be in the business.
Get rid of those old structured HR manuals that walk people through outdated corporate culture and make sure your training programs are fluid. You may have to reinvent your training process, and even how your teams operate as a whole. As you’ve done with job functions; break the tactical (using tools and defined templates) trainings away from the strategic (personal, one-on-one, hands on, subject matter expertise). At the end of the day, you should be able to build a functional team that can handle more projects quickly, and that is able to better adjust workloads when an individual leaves unexpected. With more time and a little bit of empowerment, these learners will become the next leaders (and trainers) for your organization.
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