Gartner Blog Network

The Good And Bad Sides of Visibility

by Debbie Wilson  |  August 25, 2009  |  3 Comments

My colleague and friend Andrew White was kind enough this morning to send me a link to a very interesting article in today’s Financial Times:  When Procurement is a Matter of Life and Death.  I think it’s a good article from the standpoint of bringing up that procurement need not be a backwater for “little people.”  It’s a wonderful place to be for capable people that are fascinated with how to build a top-notch, innovative supply base while simultaneously keeping spend to a minimum.  I’m really glad that people are more and more broadly recognizing the important and strategic contribution procurement can make to the organization.  

 But the article also demonstrates the continued lack of understanding of what procurement does.  Lost tanks?  Procurement BUYS things – including tanks – but I’ve never seen the task of choosing where to keep things or setting up an inventory system that effectively tracks it location as in-scope for procurement.  Procurement’s job ends when the purchased items or services are received.  And a helicopter with a kitchenette?  Procurement doesn’t design the products it buys – at most procurement would work with suppliers to facilitate input into design, not decide what features to put in.  

 Someday I hope to read articles that blame procurement for things that really are their fault – such as picking unduly risky vendors, not addressing supplier performance issues, or paying too much for what they buy.  And until then, I guess I’ll be glad to settle for procurement increasingly getting the attention that it deserves.   

Category: cost-cutting  procurement-staffing  

Deborah R Wilson
Research Vice President
8 years at Gartner
15 years IT industry

Deborah Wilson, a Gartner research vice president, covers procurement strategies and applications. Her areas of interest include procure-to-pay, e-marketplaces, e-sourcing, spend analysis, services procurement and supply risk assessment. Read Full Bio

Thoughts on The Good And Bad Sides of Visibility

  1. David Heller says:

    The view that “Procurement’s job ends when the purchased items or services are received” contributes to the fact that historically procurement has not attracted the best and the brightest. Why would someone want to be a part of an organization that has, in the big picture of things, a very limited scope? For both of the examples you referenced I can think of reasons why procurement absolutely should have been expected to be involved:

    Lost tanks: were they ever received? were they logged into some solution that helps track fuel, maintenance and munition costs that could lead to procurement helping lower costs in those areas

    Kitchenette in the helicopter: For a multi-billion project procurement should be involved at a detailed level on ensuring the supplier understands the requirements, and in continuing to monitor the project for cost overruns. As was reported in the NYTimes “the project underscored the larger failure to accurately assess the cost of military projects in advance”. Who better than procurement to address that failure?

  2. Debbie Wilson says:

    Thank you for your comments David but I think your naiveté is showing. First of all, establishing procurement strategy, sourcing vendors, and negotiating pricing is far from a “limited scope” activity. I don’t think any excuse is required to take pride in the ability to perform those tasks well or in the value that doing these things well brings to the overall organization.

    Second, in the tank example, I agree that procurement’s job isn’t done until something is recieved. (you asked – were the tanks ever received?) Here we agree, and this is what I originally said. And then last, I also agree that accurately projecting and then crisply managing costs is part of procurement’s job. But given that procurement did that, the job of deciding what features to leave in and what to leave out should be the duty of the designer/requester.

    Here’s a story. Years ago a very talented commodity manager for facilities (and one of my BEST people) got herself in a pickle because she crossed that line into design. Our organization was building a new headquarters, and she was negotiating the furnishings contracts. Somewhere along the way she ended up participating in the decision of the choice of carpet design. Well once the carpet was installed, I heard that our CEO didn’t like the color. “Who on earth picked that . . .” was asked, and the CEO was most unhappy that the choice was that of my wonderful staff member. Well you might imagine what ensued – ridicule over why a procurement professional would be in the business of picking the carpeting color. I was later unable to help her with a promotion because people remembered this error. This is what organizations hire interior designers for – at least for projects this large.

    Should procurement go to the whatever department and say, “Sir/Madam, did you know that adding a kitchenette to the presidentail helicopter is costing 524,000?” YES. Absolutely, and this is another complex and honorable job. Should they say, “Sir/Madam, I think its a waste of taxpayer money to add a kitchenette to the helicopter . . ?” Well this, I assert, is crossing the line.

  3. David Heller says:

    I guess we have a different opinion of what value a procurement professional should strive to provide. The superstars I know in the discipline wouldn’t want to be put in a box. If that’s being naive than I’ll take the label.

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