Talking About Procurement with Two Strategic Sourcing Pros: Outsourcing, Skills Challenges, Differences Between Markets

November 23, 2017

Over the years that we’ve been writing the Argentus blog, we’ve had the opportunity to interview a number of inspiring and accomplished leaders from within the fields of Procurement, Supply Chain Management, and Logistics. It’s always a great chance for us to talk shop, and to let some of the brightest lights in our network share their expertise with our readers.

Today, we’re thrilled to share our latest interview: We spoke with Guillaume Boisserpe and Jane Zhang, a powerhouse duo of independent Procurement practitioners who specialize in delivering value and cost savings to companies.

In early 2017, Guillaume and Jane decided to leverage their considerable Strategic Sourcing and Category Management experience in the telecommunications industry to start their own practice, seeking to apply the lessons they’d learned about Strategic Procurement towards helping a variety of clients. They founded ETCH Sourcing, a boutique outsourced Strategic Sourcing provider located in Calgary and servicing clients across North America.

We spoke about what it’s like to strike out on your own with a consulting practice in Procurement, the past and future of the field, as well as their take on the geographic locations where Strategic Sourcing is most advanced, and where it needs to catch up.

How did you start ETCH Sourcing?

Guillaume Boisserpe, Co-Founder and CEO of ETCH Sourcing

Guillaume: We’re Procurement professionals who have been doing this for quite a while. I’ve been doing Procurement for 10 years – Strategic Sourcing, Category Management, Spend Analysis, Contract management. Jane and I met at Shaw Communications in sourcing, and we decided to start our own sourcing practice. We asked ourselves, can we put together a sourcing team that can help mid-size organizations realize savings without them having to invest in building a full team, or paying big bucks to hire a big consulting firm?

Interestingly enough, ETCH is 9 months old so the business model changes every day based on clients’ needs.

Jane: Our philosophy was to set it up on a contingent basis and only charge clients when we deliver value to them rather than an upfront cost.

What do mid-sized companies have to gain by hiring outsourced Procurement professionals instead of increasing their full-time resources?

Jane: The first thing is, instead of having to ramp up your internal teams and bring them to that level, you have immediate access to a skillset and level of expertise, which allows them to hit the ground running. Having worked and lived Procurement in permanent roles, I can tell you that it’s definitely a rush every single day and you often don’t have a chance to take a step back and get more strategic. Sometimes companies need someone from outside with the bandwidth and knowledge to help them look at their vendor base and get more strategic about their spend. The reality is that, as Procurement, we often don’t have enough time in the day to step back and build long-term strategies.

One thing we often talk about at Argentus, as we think about the future of Procurement and Supply Chain, is the next generation of talent. Where do you think tomorrow’s Procurement professionals are going to come from?

Guillaume: Most people think that the next generation of sourcing talent will come from tactical Procurement, and it’s rarely true. In tactical Procurement as in Sourcing, you’re always overwhelmed by the amount of firefighting you have to do. Once you enter a tactical Procurement job, placing purchase orders, having the data right, tracking orders, following shipments, measuring KPIs, you often don’t have the time to learn the job of Strategic Sourcing.

We believe that the next generation of talent will come from junior talent with a business degree and the potential to be trained into sourcing superstars. Graduates in sourcing don’t really exist today because there aren’t many universities that train sourcing specifically. Most focus on Supply Chain Management, with bright people coming out ready to tackle big operational supply chain challenges. Some universities are starting to teach contract negotiations and category management techniques, but it’s still limited and students don’t often know it exists.

Awareness is growing out west, and mid-size companies don’t even necessarily know what Strategic Sourcing is – it’s very new there. We’ve discovered that even the SCMA Alberta chapter has started to shift from a Supply Chain operations focus to a category management focus, as the Oil & Gas industry is starting to put more emphasis on it as well.

How has Procurement changed over the past few years, and where do you see it going?

Jane Zhang, Co-Founder and COO of ETCH Sourcing

Jane: Companies are starting to recognize the importance of it. More industries are starting to bring on the framework of Category Management and Strategic Sourcing. The problem is that there still isn’t a deep enough understanding across the board about what it means to be strategic about your spend. The past 5 years have been all about growing awareness that this profession even exists, and what it does. One of the biggest things we see in corporations is that Strategic Sourcing sees themselves as the leaders of initiatives, but the reality is that it’s there to support stakeholders. We need to start taking a different approach and start saying, if I’m supporting stakeholders, what are the problems I need to solve?

Guillaume: I agree with Jane. Strategic Sourcing needs to recognize that it’s a support organization and act as such. I find that the difference between 5 years ago and 5 years in the future is geographically based. Europe and Asia are ahead of North America. Back in the 80s, big consulting firms started preaching the importance of Strategic Sourcing, with various degree of acceptance across the world. It was especially important in the automotive industry, with a low margin and a high level of defects – they needed better pricing, better sourcing, better quality.

In Europe, there’s a very strong innate understanding of sourcing across a lot of different businesses. I would talk to friends back in Europe and they’d know exactly what I am doing here, even if they aren’t in Strategic Sourcing themselves. Talking to people in Eastern Canada, they often have a basic idea of what we do. You go to Western Canada, and they don’t always understand what sourcing is. So in Calgary, it seems like people have started to realize the importance of it in the last 5 years, but they’re struggling with the shift from tactical to strategic.

One thing you focus on is the difference between “building” a strategic sourcing capacity and “sustaining” that capacity. Would you speak about that a bit?

Guillaume: Sure. When a Strategic Sourcing function starts to become more mature, everyone starts talking about risk and how to manage it. How do you manage your risk compliance, and tolerate risk for force majeure events (like the Fukushima accident, earthquakes, etc) that might impact and disrupt your Supply Chain? Not everyone is there yet. Everyone recognizes that cost savings are only one step on the ladder to Strategic Sourcing maturity, but not everyone has been able to leap to that higher branch. There are a lot of great talents and minds putting Supply Chains in place, but then it’s hard to move from “build” mode into ”sustain” mode.

I think there’s a big difference between sourcing and vendor management. At a certain point, you have to recognize that your organization requires more vendor managers than sourcing people. You need to bring on more efficient contract managers – people who are really good at keeping the relationships alive and thriving, while the “builders” move on to new challenges. What we try to do is get the Strategic Sourcing framework in place, then help our clients ramp up their capability to sustain it.

Jane: One other thing I wanted to mention related to skills is that the industry right now is very category-specific. Someone will say “I’m in IT sourcing so I need an IT sourcing expert,” or “I’m in chemicals so I need a chemical sourcing expert.” The reality is it’s a practice. In every organization there will be a subject matter expert for every specific category that can be leveraged by the sourcing team. It’s very ingrained within companies that people need a specific background in that specific contract – we strongly believe that as the industry is evolving the focus should be on people’s understanding of Strategic Sourcing as a practice rather than knowing that one contract very well.

 


A big thank you to Guillaume and Jane for taking the time to chat with the Argentus blog! We hope you’ve found their perspective insightful, and we encourage you to check out ETCH Sourcing’s website. 

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