If you’re in procurement, the people sitting across the negotiation table from you are spending ***10X the amount of time in training that you are.***
Let that sink in. No, really. Let that stew for a while.
Yet that’s the reality. Salespeople have better systems, tools, data, market data, training, and more resources, personnel, and budget than you do. They have better everything than you.
What’s the reason?
It’s really simple. Salespeople are considered the “rain makers” inside of the company. They generate revenue.
Sales gets funding. Sales gets resources. Sales gets tools. Sales gets everything they need to succeed.
Procurement on the other hand is often viewed and funded as a cost center. Before you attempt to debate with me, tell me if you have all the headcount you want and need to run your department effectively.
And budget? Do you have enough to get all the systems and tools you want and need? For all the global face to face events you want and need to schedule?
The answer that I’ve seen with almost company is a resounding ‘no’.
And what is the implication? Well there are many, but let me just focus on one:
Training. Sales view training as a necessary way to get better results. Results at the negotiation table. Against you.
They’re spending an average of 20% of their time in training. That’s what I’ve read and that’s what I’ve seen.
Procurement on the other hand is spending up to 2% of their time in training. That’s what I’ve read and that’s what I’ve seen.
It’s amazing that we are able to get anything done at all in negotiations. If it weren’t for the fact that we are the ones with the money, I don’t think we could get anything done.
All of this needs to change. Procurement needs to break the legacy model for investment in training.
But procurement can’t just decide to do this. The C-suite needs to decide to fund this.
And the only way the C-suite will give a significant bump to procurement’s discretionary expenditures is if they stop seeing us as a cost center and start seeing us as a Value Added Center of Profit.
As a source of enterprise strategic advantage. Investing in procurement has to be seen as an investment in EBIT growth.
Negotiation has to become a corporate capability. Most companies I’ve worked with have reported 5-12% increased savings run rate after more intensive Capability Building engagements that we’ve run with them.
For as long as corporations view investment in procurement department training as being the same as investing in payroll department training, they will always lose.
And so will their stockholders.
CPOs, I’m talking to you. You own this. You own demonstrating the ROI on investment in procurement training. Raise the bar on your own deliverables. Focus on EBIT improvement. Focus on enterprise advantage. Let’s do this.
Now go off and do something wonderful. Be your best!
– Omid G.
“THE Godfather of Negotiation Planning” ~ Intel Corp
P.S. The CPSCM™ certification program has been invested in my almost 40% of the Fortune 100. Contact my office at Support@PurchasingAdvantage.com to find out more. It’s a great way to put your procurement department on the path to both being and being perceived as a Value Added Center of Profit.
