Who is better to effect the Toughest changes in Strategic Sourcing? Your Permanent Team or Third Party Contractors?

February 19, 2014

Change better handled by Third Party Contingency Experts…

We have some interesting thought leadership to share via one of our senior Strategic Sourcing professionals in our network concerning the role of Strategic Sourcing as it is today and moving forward. This particular individual with a background in full-time Strategic Sourcing within Ontario’s public sector had some candid thoughts about the current trends in staffing for Strategic Procurement which we thought might be of interest to our network and might spark a further discussion.

If you follow us, you know we’ve been blogging up a storm about the move towards engaging contingent staffing for more and more Procurement and Supply Chain functions on a global basis. We’re hearing from more and more companies who want to explore and move forward with this possibility for middle and high-level strategic Procurement projects. And we have lots of Intermediate and Senior Strategic Sourcing professionals for example in our network, and on active contracts, who prefer to have a consultant/client relationship instead of an employee/employer situation. Why? Well, this individual and others we have spoken with raise some valid business points about expectations that organizations have for developing Strategic Sourcing as a whole and the ongoing difficulty of driving change in Procurement/Strategic Sourcing through their permanent, full-time Strategic Sourcing personnel who often get massive push back from business stakeholders.  It often becomes a huge politically charged mess.

“It’s about moving away from using full-time employees to more of a consulting arena for strategic Procurement Professionals,” our source says. “Procurement resources usually encounter resistance from end users, which is not a productive situation when it happens.” We’ve heard this from lots of Procurement professionals. It can be difficult to get buy-in from critical stakeholders across an entire business.

“I don’t think Procurement has (completely) figured out the role of strategic Procurement,” she says. “It’s not to produce savings or to produce contracts, it’s about generating change. The main thing that strategic Procurement produces is change. For example, this change could take the form of a change in Suppliers or IT systems. Because Procurement resources are set up traditionally as internal resources, whenever they generate change it can lead to a backlash. This ultimately leads to their (position) being diminished and their value being disputed. In management consulting – audit projects for example — the consultant who comes on board doesn’t have a political employer/employee relationship, and questions of allegiance don’t get into it. ”

In other words, the pushback that full-time permanent strategic sourcing professionals often experience is the result of a sort of paradox: they’re a permanent employee who’s tasked with making critical change, which sometimes goes against the desire of the individual stakeholder department. It’s harder to make change happen when internal company politics enter the equation. Fundamentally, in her eyes, the role of strategic Procurement makes more sense when conducted through a consulting framework: “Many Procurement jobs are project-based jobs,” she says. (Change is easier to happen in a company as a third party and quite rightly she points out) “ why pay benefits for someone who’s doing project-based work?”

Interestingly enough, our source is not the first to identify that in some international contexts, such as the UK and Australia, Strategic Sourcing has already moved more significantly to a more sophisticated contingent functions with Procurement workforce staffing specialists providing more project-based strategic sourcing personnel for those roles that require change to be pushed forward within their organisations.

What do you think? Love to hear from you or if you have a need for contract staff – reach out to me today – bhann@argentus.com

Over and Out

Bronwen

 

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