Here’s How Organizations Can Improve Their Procurement Outcomes Through Training and Skills Development

November 18, 2015

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This week, we interviewed Maureen Sullivan, LLB, CTP. Maureen is a past practising lawyer and current procurement and contract management education professional.  She is President and Legal Editor with NECI, an organization based in British Columbia offering educational opportunities for Procurement professionals from the introductory right through to the executive level.

For our part, it’s always interesting to cover unique opportunities for Procurement professionals to raise their skills. We spoke with Maureen Sullivan about her organization’s various training initiatives, as well as the evolving world of Procurement education and how organizations can educate their employees about Procurement strategy to help drive success:

Why don’t you start by discussing NECI and its Procurement education offerings?

 “We are a Procurement and Contract Management training organization,” says Sullivan. “One of the things that make us unique is our focus on Canadian procurement law. Our Public Sector Procurement Program (PSPP) is our flagship, as it is an integrated training program that is nationally accredited by the Canadian Supply Chain Sector Council (CSCSC).  Program components are available online, in the classroom, or in any combination thereof. We also do e-seminars over Webex designed to take a deep dive into a narrow topic, meeting the need for just-in-time training on emerging issue such as new case law or trade agreement developments. We hosted an e-seminar, for example, on the Canadian European Trade Agreement with Brenda Swick from McCarthy Tetrault as a guest presenter.  We have also tackled issues such as total cost of ownership in procurement, corporate social responsibility, and other leading practices and evolving expectations.

Why do you see it as important that organizations and individuals upgrade their Procurement certifications and skills?

“There are two key issues driving this,” says Sullivan. “The first is that there’s a huge retiring population in the procurement community. Many baby boomers are moving out of the workforce, and we see organizations across the board struggle with recruitment, retention, and knowledge transfer. Offering recognized high quality training programs and other skill and knowledge development opportunities is not only a way to attract new employees, but a great way to retain and upskill the ones you already have.

“The second issue we see is that Procurement is taking on a higher profile within organizations, becoming more recognized as really a strategic leadership role rather than the traditional view of procurement as a transactional kind of function. This requires a higher level of understanding of emerging best practices, leading-edge ideas and strategic foresight by procurement professionals.”

Could you speak to some of the strategic considerations that organizations can become better equipped to handle through training?

“One key issue facing many procurement organizations these days is the need to embrace and implement a robust contract performance management system that is linked to future opportunities with the organization. In Procurement, there are a lot of legal twists and turns, including a ‘duty to act honestly’ in contractual dealings, imposed by a recent Supreme Court of Canada decision” says Sullivan. “If you’re going to terminate a contract, therefore, you have to have a lot of documentation about deficiencies and the opportunities that you’ve given the contractor to correct things.  A big focus of our training is on the importance of thorough procurement planning. Procurement folks are often so rushed to get the [RFx] document out the door that, later on, they have to fill in gaps in the contract language and rely on excellent relationship management skills to try and stick-handle things through the rough patches. As we emphasize, thorough planning really does pay off tenfold downstream, and can make or break successful contract performance.  One of the key messages with our training at the senior levels, for example, is to give Procurement staff the time they need to do it properly on the front end, before the document is released.”

“A lack of planning in the Procurement process presents both a resource and a reputation risk,” says Sullivan, “Depending on your industry or specific project, the strength of your reputation with vendors and suppliers can be of critical importance.  If you don’t have a large pool of vendors to begin with, losing two of three of them can really undermine your ability to realize best value from your process.   As we like to say, every RFx you issue says something about your organization, and you won’t know who you don’t attract because your document is sloppy or the deliverables are not well defined.  And those that do respond may well factor in a price premium to cover potential risk that is not clearly addressed.”

What are some of the other strategic considerations in Procurement that NECI helps train organizations and individuals to handle?

“There are a couple of different areas,” says Sullivan. “for reasons just discussed, Vendor Relationship Management is taking on a higher profile within Procurement. There’s more recognition that we need them as much as they need us. Conflict resolution and interest-based negotiation skills are important strategically so that you can have discussions with vendors and get through things in a way that not only preserves but can also enhance the relationship going forward.  This is particularly true for organizations that are moving into the realm of the non-binding RFx, where negotiation itself is core to the selection and award process.”

“Our Negotiation training focuses on the interest-based approach, which is more collaborative than other negotiation methods. The key is to take the time to examine what lies behind the other party’s ‘position’. What are their needs and concerns? What are the motivations underlying what they say they need or want?  An understanding of the interests of both sides helps the parties to come up with creative solutions to a conflict, rather than resorting to the knee-jerk reaction of immediate compromise.  We talk about working to expand the pie, rather than simply cutting it in half. The interest-based approach helps build vendor relationships, but it also allows you to get better solutions.  In reality, most negotiations tend to be a dance between the interest-based and the positional approach.  You need to understand both so that you can protect yourself and be effective in the face of all types of negotiators, however we strongly encourage organizations to start with an interest-based approach, and then move to a more positional approach only when and if needed. That is our recommended strategy because, unlike a one- time vehicle purchase for example, an organization’s ongoing relationship with those vendors and suppliers is so important. ”

“Another closely related area that we see Procurement organizations struggling with is evaluation of performance. Procurement folks can become so busy that they don’t take the time to incorporate specific and measurable performance control mechanisms into the contract. Is the supplier going to answer our calls ‘within 30 seconds’, or within a ‘reasonable period of time’? Which do you think will be more effective for holding the vendor or contractor accountable and demonstrating true value for money?” “Building effective and specific performance measures into the contract is critical for effective contract management.  The best relationship management skills in the world are of little use without specific expectations set out in the contract.  On the other hand, the best contract in the world does you no good if it sits on the shelf gathering dust, so the two are inextricably linked.   In addition to helping keep the under-performing vendors out of your next process, you want to be able to recognize and reward those who are going  above and beyond your expectations.”

Senior Executives and Procurement:

“Probably our hottest course offering right now is specifically targeted to senior executives – a two hour session entitled ‘Staying Alive in the Procurement Jungle’,” says Sullivan. “The key message is that procurement is a complicated area of practice, so executives need to understand the key risks, and then maintain their oversight role while allowing their skilled procurement folks to do the heavy lifting. When a new municipal council is elected, for example, those councillors often have no procurement experience or background. They need to understand the risks of speaking with vendors during the RFP (request for proposal) blackout period, of mixing business and personal relationships, of becoming too enmeshed in the procurement design or trying to otherwise influence the outcome of a process.  While usually well-intentioned, these folks are operating in a legal vacuum if they don’t understand how procurement works, and can create inadvertent liability, criticism and other political fallout by their actions. As also mentioned, we help executives understand why they need to give Procurement people time and adequate resources to do proper planning.   We really encourage organizations  to provide high level education and risk awareness for the executives and senior managers.  They don’t need two days of training – give us an hour, if that’s all the time we have, and tack it onto the end of a board meeting or other scheduled event.  Some risk awareness for executives is always better than none, and it makes procurement’s job easier in the long run.”

Your organization offers online training and skills development in addition to in-person sessions. What are you noticing in terms of the differences in these approaches?

“We’re seeing a big demand for online training,” says Sullivan. “In many of our online offerings we use the Flipped Classroom learning model where the knowledge transfer happens during self-directed online modules, and then once a week the students participate in a live online discussion with the instructor where they apply the knowledge they learned that week.  When we begin those sessions, the opening slide is often a map of Canada, and they are directed to click on the arrow and ‘put themselves on the map’.  This provides a great visual for participants.  They can immediately see there are learners from all over the country – Nunavut, Halifax, Alberta, the Yukon.  It is not uncommon to have a cohort made up of all geographic regions in the country.  And of course there is no travel involved, so the convenience and efficiency are great.”

“On the other hand, the live, in-person classroom training has added benefits of team building, networking and colleague interaction. You can get business clients, contract managers, and Procurement all in the same room. So not only are they learning the same thing but getting to know each-other and seeing the other’s role through a different lens.  It’s both a team building and a networking opportunity that can be difficult to replicate in an online environment.” 

A big thank you to Maureen Sullivan for the interview! She can be reached at maureen@neci-legaledge.com if you’d like more information about NECI.

Continuing skills development is part of the key to successful strategic Procurement, both proactively and in reaction to external events in the marketplace.

 There’s sometimes a perception that Procurement and Supply Chain certifications and training programs only offer transactional instruction, but organizations like NECI show how continuing education can help add a strategic dimension to Procurement professionals’ skills, and to the function within organizations. logo_icon4

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