The Real Deal: What Skills Best Public & Private Purchasers Share
Sandra M. Schmitzer, C.P.M., CPPO
Sandra M. Schmitzer, C.P.M., CPPO, Facilities and Office Support Commodities Manager, J.D. Edwards & Company, Denver, CO 80237, 303/334-9030, email@example.com
86th Annual International Conference Proceedings - 2001
Abstract. Spoken or unspoken, there exists a belief that purchasers who have their training and experience in the world of public procurement are not suited for careers in the private sector. Most likely, a perception of the government purchaser as someone "doing it by the rules of law", always taking low bid, marching to drummer not their own, is behind that belief. As someone who has now worked in both arenas, I'm here to even the playing field. Those characteristics that make a person a world-class purchaser for government, schools or universities are the same qualities that are valued and rewarded in private industry.
The current top 10 skills required for a world class purchasing professional are:
- interpersonal communication
- decision making
- teaming abilities
- customer focus
- analytical understanding
- influencing and persuasion
- business conditions
- conflict resolution
- managing change
This ranking was determined by the responses of 96 purchasing managers and confirmed by a review of current literature and research, as well as in-depth interviews. (Giunipero 2000, 46)
Interpersonal communication is critical to our very existence in today's world. Public or private, the purchaser presents an organization's face to the outside world. The appropriate tone, manner, non-verbal behavior, written communication and spoken word all convey the intention, culture and relationship to those with whom business is conducted. Internally, whether the interaction is with the board of directors, a legislative body or a cross-functional team, the ability to communicate clearly and succinctly is a skill whose importance cannot be overstated.
The main purpose of a company investing resources in the purchasing or supply chain function is to give itself a group of professionally trained individuals who are capable of making the most considered and impartial decision on how dollars are spent. Every single dollar saved makes a difference, whether it's returned to the bottom line as profit or it goes back into the budget to buy additional textbooks, more pothole fixing or research equipment. Learning the decision making skills required for making weighty, complex choices and then being able to explain and defend the choices is a critical procurement skill. Michael Hammer says, "You really have to understand the value proposition you're offering...You've got to know enough about the larger environment so that you can make good decisions...You really have to be-and you used the right word-a "professional" who assumes broad responsibility."
Team sourcing is a practice used in the public sector for quite some time. Complex procurements are normally handled using requests for proposal. A team of people from affected departments is put together to develop the scope and specification. After the RFP is returned, the team evaluates the written proposal, hears vendor presentation, makes site visits, if necessary, and makes the authoritative sourcing selection. Mary Ann Porter, in an article on teams, said "For all the troubles with multifunctional sourcing teams, a majority of purchasing pros (52%) surveyed by Purchasing say the performance of teams is still better, on average, than performance under the old individual style of purchasing". The skills she lists as being most needed to work efficiently on teams are a virtual parallel of the 10 top skills required overall. A good team member or leader also needs the willingness to take risks, project management skills, patience, and humility. (Porter 1999) Teaming abilities are valued both publicly and privately.
It comes as a surprise to many private sector purchasers that negotiation skills are highly prized and vigorously practiced in the public sector. The rules that govern the circumstances under which negotiation comes into play may vary from government entity to school or university, but very few current public procurement policies prohibit face-to-face negotiation. Whether it's a construction project that needs to be value-engineered to bring it within budget or a contract already in place that needs tweaking to make it work effectively, negotiation is the process used by truly skilled purchasers to get things on track.
It's no longer location, location, location...it's the CUSTOMER! Governments serve customers just as private industry serves their markets. Whether its students or taxpayers, savvy public purchasing agents are focused on meeting the needs of those they ultimately serve. Customer focus keeps team and individual projects in line with the purpose and goals of the larger organization. Procurement people also know that they serve internal customers (other departments) as well as their external customers. Staying focused on customers' needs and wants helps purchasers keep their entities from costly and embarrassing mistakes.
The flood of data and information that must be digested and assessed by the procurement department has grown from a trickle to a flood to a deluge in the past two decades. It may be nice to have all this at a touch of the keyboard, but how to manage it all into some useful resource that helps with decision making process? Analytical understanding is a skill that must be constantly improved upon. Whether it means learning to use complex Excel Pivot Tables to analyze the spend of the organization, to master cost/price analysis, or to grasp the secrets of research on the Web, today's professional must constantly learning to better manipulate the data swirling around him or her.
People come to the purchasing and supply chain management profession from a wide variety of background. Although more formal academic training has been made available and more companies now say that they want to hire professionals with logistics, engineering, legal or finance degrees for what is only recently considered a strategic function, most who have been in procurement for more than ten years have acquired their skill set through experience (Ciancarelli 1998). I've always been grateful that my academic background in communications and my stint as a debate and forensics coach gave me a chance to hone my influencing and persuasion skills. Anyone who has ever addressed a group of engineers and needed to convince them that there are sound financial decisions which need to be made affecting their latest design know how essential the ability to influence people and sway opinion is. The sales force used to be the enemy or, at best, a reluctantly tolerated necessity. Nowadays, purchasers find themselves needing the same persuasion skills in order to sell teams, stakeholders and customers on the wisdom of tackling a problem or implementing a solution.
A shortage of drywall or a local construction boom has an equal effect on the public and private purchaser. Being aware of business conditions is more important than it has ever been. It's no longer enough to simply be aware of what going on locally or statewide; even being up-to-date on the trends and conditions in this country is no longer adequate. In order to return full value to the employer, a professional purchaser knows the possible impacts to his or her entity that could result from relevant conditions all over the world.
It's right, it's wrong; he said, she said; it was on time, it was late...Sounds way too familiar? Organizations look to their procurement professional to handle much of their conflict resolution. Public or private, conflict is a fact of life in the purchasing practice. Whether it's a material breach of a contract or an angry customer furious with the latest supplier, purchasing professionals need the skills of a mediator and the wisdom of Solomon to smooth the waters and return the relationship to stable footing. If things are too far gone, how manners are resolved can mean business going forward uninterrupted or spending valuable money and man-hours settling things in court.
Managing change is the final skill seen as most valuable in a world-class purchasing/supply management individual. The person who handles the rapid pace of today's world well, both personally and professionally, is sought after by employers. Not only must purchasers manage change for themselves, they must also facilitate change for their peers and their customers. Flexibility and accommodation are critical tools in the modern procurement toolbox.
According to Ryan Vemmer, "The e-business trend has been a watershed moment for purchasing agents in all industries, simply because knowledge of Internet buying has made buyers so vital in corporate functioning and structure. Purchasing professionals have always been important and now they are even more so." Although that remark was written about those in the private sector, the same is equally true of those who work for educational, institutional and governmental organizations. The customers of the private sector vote with their dollars but the customers of the public sector actually use the ballot box. The government that is not responsive to the desires of its citizens will be voted out, just as a company that doesn't produce what its customers really want loses market share or disappears completely. A critical component of any organization's plan to provide the continually improving value, efficiency, and quality demanded by its customers is the purchasing professional. The world class practitioner brings these skills and many others in making his or her contribution to a successful purchasing/supply management strategy.
- The Evolving Role of the Purchasing Professional. Purchasing online 2000 (cited 29 November 2000). Available from the World Wide Web: (http://www.manufacturing.net/magazine/purchasing/comunity/evol.html).
- Ciancarelli, Agatha. Purchasing careers get redefined [online]. Purchasing, 10 December 1998 (cited 29 November, 2000). Available from the World Wide Web: (http://www.findarticles.com/cf_0/m3148/9_125/53604212/print.jhtml)
- Giunipero, Larry, A Skills-Based Analysis of the World Class Purchaser. Tempe, AZ: Center for Advanced Purchasing Studies, 2000.
- Hammer, Michael. Reengineering the Supply Chain: An Interview with Michael Hammer [online]. Supply Chain Management Review, Fall 1998 (cited 16 November 2000). Available from the World Wide Web: (http://www.manufacturing.net/scl/scmr/archives/1999/sc109.99/09hammer.htm)
- Porter, Mary Ann. Team sourcing takes hold, but firms need more practice [online]. Purchasing, 17 June 1999 (cited 23 November 2000). Available from the World Wide Web: (http://www.findarticles.com/cf_0/m3148/16_126/54946216/print.jhtml)
- Vemmer, Ryan. Lots of jobs, lots of qualifications [online]. Purchasing, 18 May 2000 (cited 16 November 2000). Available from the World Wide Web: (http://www.findarticles.com/cf_0/m3148/8_128/62201592/print.jhtml)