What is excellence in procurement – and how we can encourage it? We chat to Olivia Brown, a Managing Consultant with Rowe Advisory UK…
Tell us a bit about yourself.
I spent the first 16 years of my career as an employee with oil and gas operators, both here in the UK and internationally, so I have a solid foundation in working in contracts and procurements. Later in my career, I became focused more on general management roles. Those roles combined led me to understand what good business looks like, and the things to avoid – not just within the function, but more broadly within the wider business context. I started working as a consultant with Rowe Advisory in 2017, initially working in support of clients in overseas, in Australia.
Give us some background on Rowe Advisory.
Rowe Advisory was established in 2013 by a very inspirational lady called Jody Rowe. I started to get involved with some of the Australian clients in 2017, working remotely from here in the UK to support them in redefining, updating, reviewing their procedures and their processes.
Typically, what we find is that a client will have a particular requirement for an area of concern, so we will go in and start to address that and help support them. From there, we often get involved in other areas for improvement as a consequence.
In 2020, Rowe Advisory set up a branch here in the UK. It was difficult timing because we were launching it during lockdown. We had the challenge of the pandemic which was also compounded by the oil price crash. However, it was a real opportunity for us to reestablish some individuals within our network and reconnect with previous colleagues to tell them who we are and what we do, and make them aware of how we can help as in when the need arises.
What does ‘procurement excellence’ mean to you?
For us, it’s about aligning the strategy and the delivery of third-party spend with the needs of the business. It’s really connecting the department’s activity with the business priorities. To best achieve that, we see a focus on the overall procurement operating model. As previously mentioned, often there are areas of concern already which CPOs recognise can improve.
Generally, when we get involved with a new client, we will review the whole operating model to be more holistic in the review and understand how joined-up the department can be in providing that functional excellence back to the business. It’s really about the department adding value back to the business and establishing credibility through delivery of value to the business.
We’ll look at the people, the process, the systems, and the tools to really focus on how the department can manage risk, provide clear strategic planning, align with the business objectives, be innovative, be creative, and also collaborative internally and externally.
We’re working to elevate the role of the procurement department. It has the potential to provide significant benefits to the business, and they extend far beyond the P&L impact. The events of the last 18 months have really proven the importance of procurement departments and non-financial performance incentives; those non-financial performance metrics have become more integral to the priorities for procurement. That being said, we recognise the need to get the basics right first so it’s about having clarity on rules and responsibilities, both within the department and the business.
What have you seen by way of sector differences or trends?
The most interesting thing for me, having come from a strong background in oil and gas, is that a lot of the areas of focus that I’ve talked about – specifically identifying areas of improvement and what functional excellence can look like – are very much sector agnostic. The tactical interventions do vary depending on each client, so the areas of focus will always vary – but that’s true within any sector. We’ve seen that transcend into others. The fundamentals of what good looks like in procurement are, we’ve observed, sector agnostic.
That’s been very interesting. It’s allowed us to provide diversity of thought into new sectors. If you think about demand planning and category management, we’ve seen with some clients where it works very well, and we’ve been able to translate that knowledge and experience in working with them in embedding that, sustaining it, and building on it. We’ve been able to translate that into other sectors that are less familiar with the concepts of category management and category planning, and the importance of that in the upfront strategic planning where real value can be set for procurement.
One thing we do find in some sectors more than others is that the procurement department is seen as a transactional function, and there is absolutely a strong requirement for there to be good transacting within any procurement team. But in the context of functional excellence, what we try to do is to explain the value that can be delivered through moving beyond that phase of the department into the strategic, and doing that in an appropriately segmented way so that it is differentiated based on value and risk – and other relevant factors – but ensures that both the department and the business are focused on those contracts that are key to the delivery of the business.
How do you support your clients by driving change within their procurement departments?
We work on ensuring that the focus is in the right place to deliver value, getting the transacting right and then also, of course, post-award. The contract is then executed, and it’s not about necessarily just putting it on the shelf and leaving the business to manage it. Certainly, for a number of contracts, it’s about managing those contracts for delivery and being clear on the role that the procurement department plays in that process. A further development on that is, again, how many of those need to be strategically managed? How do you strategically manage the relationship with key suppliers to, again, further leverage the value through innovation, being creative, and working together to further enhance the value that can be achieved?
The case for change is important because people’s response will be, “What’s in it for me? We’ve done it like this for years and it’s been fine, so help me understand.” And you need to kind of take people on that journey of change. Clarity on single-point decision making, understanding that when a decision is taken, that’s not the start of a conversation on the matter – it clarifies the need to move on.
Tell us about your sister company, Promitheia Procurement.
Promitheia Procurement was established 2020. It is an online platform for procurement templates and also advisory services. It’s a web-based system so anyone can go on and buy, and download the whole series of procurement templates across the whole life cycle. It ranges from demand planning, strategy setting to people and competencies, and skills matrices, development planning, and performance management, through the procurement life cycle itself, through the transacting, into post-award, and supplier relationship management. So, they’re documents which can become available to companies at the click of a button, which is fantastic. It allows us to diversify further into new sectors who may otherwise not be able to come to us for the full suite of consultancy services.
What do you enjoy most about your work?
We have that real passion for procurement and want to really be ambassadors for what good can look like – and we want the clients to feel that as well. It can never really be implemented and sustained based on a consultant coming in and telling you how to do it. It’s very much about working alongside the client in their particular environment to understand how best to do that.