Why Procurement Must Stop Decrying ‘Rogue’ SOW Spend

‘Rogue’ is a word often thrown around in procurement when talking about spending – learn the top tip you need from Guidant Global’s Mick Feild.

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I’ve reached that point in my career when people often want to know what advice I’d give to anybody looking to get into procurement.

I like to think this is because I’ve hit some sort of experience ‘sweet spot’, and that any lifetime achievement awards are still just a tiny speck on a distant horizon.

To pass on my ‘one top tip’ to as many budding procurement stars as possible, I’d thought I’d set it down here on the Procurious blog.

So, here goes. Here’s my top tip:

Stop using the word ‘rogue’ to describe hiring manager spend.

And, if you can, give up the word ‘maverick’ too.

Why?

Calling any spend rogue or maverick suggests ‘bad’ behaviour

More often than not, this is an unfair way to describe what’s really happening.

Let’s recap a little to explain why.

In the not too distant past, most organisations handled procurement in a fully centralised way. One procurement team, under a CPO’s leadership, controlled all business spend.

Before long, the limitations of this approach became a source of great frustration – especially in global organisations. Large, central procurement teams were seen as:

• out of touch with hiring managers’ needs
• costly (from a payroll point of view) and
• too utterly swamped to be effective.

So, the devolved approach emerged and became increasingly popular, with purchasing decisions taken by hiring managers and supported by a smaller central procurement team.

In theory, devolved procurement is great. In practice, we’re only doing half the job.

Here’s why I detest the word rogue: it blames hiring managers for a failure that procurement (and the business at large) has set them up for.

In our rush to delegate down the spend authority to ‘the coal face’, we neglected to pass on the tools that hiring managers needed to use it wisely.

Namely, the right skills, tech, and data.

Imagine you’ve got an engineer who cuts code and manages a team brilliantly, and then you ask her to manage contracts as well, without any training or framework as a guide.

Does it really feel fair to describe her buying decisions as rogue?

If our engineer’s buying behaviour is ‘aberrant or unpredictable… with damaging or dangerous effects’, that’s a risk that the procurement specialists have to own.

The words we use matter. Rogue and maverick are a way of avoiding responsibility.

By increasing the distance between purchasing decision makers and procurement HQ, we empowered people to make faster decisions that better meet their needs.

But we haven’t put enough rigour in place.

Most organisations still don’t have visibility over what is being bought, by whom, and for how much. They haven’t provided the guidance and direction required to make good buying decisions.

They simply threw a bucket of money at hiring managers, and then complained about the way it was spent.

In other words, we devolved down the spend without devolving down the necessary skills or frameworks.

And that means we’ve set our hiring managers up to fail.

In this scenario, who’s the real maverick?

Successful devolved procurement relies on training, frameworks, support, and tech.

Using a modern vendor management system (VMS), forward-thinking organisations are beginning to right these historic wrongs – especially when it comes to statement of work (SOW) services procurement.

By moving all SOW spend into the VMS, procurement teams are finally getting visibility over what’s being spent. New project briefs are made by managers within the system, bringing a level of transparency to the buying process that procurement could previously only dream of.

What’s more, by establishing watertight checks and balances around approval, this VMS-based approach to SOW ensures that ‘bad’ buying behaviours are picked up and corrected before they can create cost or compliance headaches.

Hiring managers still have the autonomy to make their own decisions. But now they can make them in an informed way, supported by clear buying policies and processes – and drawing on a wealth of up-to-the-minute supplier performance data and market intelligence.

This means we’re no longer relying on non-procurement experts to instinctively make the right calls. We’re no longer in a place where if they get it right, it’s down to sheer luck.

Don’t get angry at ‘rogue’ behaviour. Ask how you can help people improve.

Back to my original tip for those just embarking on their procurement careers.

This rejection of the words ‘rogue’ and ‘maverick’ represents a mindset shift that has stood me in good stead for many years.

The words we use matter because they influence behaviour, and behaviour creates culture.

A culture in which buying specialists point the finger at overstretched managers who are often isolated and trying their best… I’ve always felt this should be rejected.

This is how the ‘us vs. them’ mentality proliferates, and it’s how we end up in a situation where neither ‘side’ feels that their needs are being understood or met.

Far superior, in my humble opinion, is the culture in which procurement relishes its role as a guide, a support, a provider of knowledge and assurance.

This is a culture in which the organisation’s buying behaviour thrives under procurement’s direction. And this is how, as a procurement professional, you’ll constantly prove your worth and add value to the organisations you work for.

Want to learn more from Mick? He joined the discussion panel for our recent webcast, Level Up Your Statement of Work. Listen on demand here!