Nobody grows up dreaming of being in procurement. They might want to be firemen, doctors, or military officers. But procurement staff? How would they even know what the job is?
In my conversations with people in the field, people slide into the role. Perhaps they start out in accounting or finance. Or, if they work for a large organization, management assigns them to the function out of a training program.
Sometimes, especially in the largest corporate environments, they may be seconded to procurement for a rotation through various departments as they ascend the leadership ladder.
Whatever the path, they have to pick it up without much, if any context. Chances are they learn on the job.
At one end of the spectrum, particularly in smaller entities, they will be thrown into the mix, to learn on the job, without any formal training. At the other end of the spectrum, they may be given some manuals to review, in addition to classroom time. The United States Department of Defense has so many people working in the role, spending the better part of a trillion dollars a year, that they offer a graduate degree from something called Defense Acquisition University.
The objectives of a good training program should be to learn (at least) the following things:
- What is the relevant law as it applies to the organization?
- What are the policies with which they need to comply (and to enforce compliance)?
- What are the techniques for category discovery, including supplier vetting?
- How does the organization execute reverse auctions such as Requests for Proposal, Requests for Quotation, and Requests for Information?
- How do they write a good Statement of Work?
- How do they work with businesspeople who get pulled into the process?
- What are the relevant technology systems and how do they work?
- What other technology systems and business processes are proximate to the procurement role?
- How much authority do individual departments have to purchase goods and services independently and how does this process work?
- How do punchout catalogs and managed acquisitions work?
- What kind of reporting does the financial function require?
- What is common contracting and is it available to them?
The most important thing to learn is judgment. How do they balance the needs of the business against their duty to protect the organization and to ensure compliance with procedures designed to deliver value-for-money?
There is a lot to know. People have to learn it under pressure. They get thrown into the mix with some training, most of it theoretical.
In large organizations in particular, there can be a great number of rules. After all, these are the institutions that have the most to lose in terms of money or reputation. Often, rules get added to the pile in response to something that goes wrong. Many of them may conflict with one another.
The more complicated the setup, the more likely it is that people just do their own thing. They fly by the seat of their pants. They wing it.
The best way to teach people about the procurement rules and why we do things the way we do is to give them a sandbox in which they can simulate a procurement event.
Note that this gamification of the training task is not just for people with the title on their business card. For large RFPs, the organization is likely to have a buying committee in place made up of people drawn from different functional areas across the firm. It may include people from finance, operations, sales, engineering, and the c-suite. None of these generalist businesspeople have any training whatsoever in procurement.
Using a sandbox to simulate the different roles of a procurement event (and rotating people through them in the course of mocking up several different purchases) helps them to understand what the ideal process looks like, even as it gives them empathy for all the different people at the table, including suppliers.
Another good tool to have is an AI chatbot that makes it easy for people in the process to interact with the compliance and policy manuals. This is tricky to pull off, but a good one will ingest the procedures and rules to the point that it can have a conversation. The chatbot might have some additional context taken from prior procurement events to be able to provide some of the needed judgment by vectorizing institutional experience. If done well, the chatbot can answer questions in different languages and for people with varying levels of procurement sophistication.
How do you train your organization on best practices?
EdgeworthBox is a procurement technology that sits in the tech stack either to augment the core platform (such as an ERP module) or to act as a standalone set of tools, structured data, and collaboration. It can also run parallel sandbox simulations, in addition to working as a production environment. We would love to hear from you. Please reach out.
