Procurement: Art Or Science? [VIDEO]

James Marland

Businessmen Shaking Hands --- Image by © Redlink Production/CorbisIs the procurement job more of an art or science? That’s the question I asked procurement professionals for the first episode of our new “Talking Shop with Procurement” video series. As you’ll see in the one-minute vignette (below), the answers are somewhat divided.

Here are some insights inspired by the “science” camp:

Procurement is a science: You do an experiment, see what works and then learn from it. This response reminded me of Isaac Newton chasing down the laws of the universe by running controlled experiments (including once sticking pins into his eyes). What is the optimal number of suppliers to invite to an RFP? Should a start price be included in an auction? The feeling of this delegate was that procurement runs according to observable rules. Discipline, repeatability, and learning from your mistakes are the order of the day.

It’s all about data. Getting good usage data for hard-to-manage categories is crucial. Sometimes procurement professionals need to be sleuths at tracking down actual usage metrics from obscure systems. For example, when putting together an RFP for security services, just how many call-outs a month is typical? What is the square footage of the buildings in scope? The better the data we can give suppliers, the better they can respond to us.

It’s like Einstein, breaking all the rules. Sometimes in procurement we need to go against accepted thinking. What worked in the past isn’t a reliable indicator of the future in a world of changing demographics, technology, geopolitics, and even climate. That’s why evergreen contracts are so dangerous. Maybe, like Einstein, you need to say that although the existing framework has worked for a long, long time, it’s time to change it. Let’s not buy this, let’s outsource it, buy it on consignment, eliminate the distributor. Do we even need it at all anymore?

Then there’s the uncertainty principle. Just as Heisenberg proclaimed that some aspects of a particle are unknowable, one procurement professional characterised her buying efforts as often incorporating “known uncertainty.” There is a temptation to overdo the research and delay, sometimes acknowledging that you can not know everything is a viable approach. Just press “launch” on that RFP!

And here are some thoughts about the art of procurement:

Procurement is all about people. The outcome of a procurement process might well be a change in supplier. How will you communicate that, and deal with leakage? How will people react? Will there be cultural issues to overcome? Science won’t solve these problems.

We have to learn to cook together. As one procurement professional put it, “You have to know your suppliers’ businesses, how they make money.  Get into their kitchen and learn to cook together.” The key insight here is that only by understanding how the supplier’s business actually works can you come up with a win-win for you both.

Sometimes it just feels like finger painting. Great art takes many forms. The photographic likenesses of Florentine portraiture are very different from the seemingly random drips and spills of a Jackson Pollock, or the breathless enthusiasm of your four-year-old presenting you with a card with stuck-on pasta shapes. Not all procurement activities are going to go through the same process, and there is a danger of “over-templating” and ending up with a process that doesn’t fit; or over-complicating when the correct approach is to just get the quote off your desk.

It’s all about the power of persuasion. Procurement is about change, and persuading people to adopt change. Whether that is done through incentives, threats, eloquence or passion: What could me more artistic than that? As one person we talked to said, “Negotiating is an art.”

For more of our favorite answers on this topic—including one guy that claims “Hey, shopping is an art!”—be sure to watch “Procurement: Art or Science?” on YouTube. And please be sure to leave a comment with your take on the subject.

James Marland is vice president of Network Growth for Ariba and writes about procurement, networks, and cloud but “always with an English accent.” For more stories like this, follow James on Twitter @JamesMarland.

James Marland

About James Marland

James is responsible for defining and rolling out strategies for the Network with particular focus on Europe. He joined Ariba at the launch of the Ariba Network in 1998 after previously being a Solution Consultant at SAP America. In addition he has held the position of Director of Algorithms at Vendavo, an SAP Partner in the area of Pricing. He has a Bachelor of Science degree in Mathematics from Southampton University. Follow James's twitter feed at @JamesMarland