The Procurement Academy is a framework to accommodate a suite of learning and development offerings to the global procurement community of the organisation. It is often designed with a specific goal in mind e.g. further optimization of spend or driving more value for all parties from existing supplier relationships. What is included in the academy could vary from eLearning courses, skills assessment, scheduled distance learning events, or all of these and more. This “blended learning” concept is important to ensure that individual learning styles, preferences and access to online and offline learning is accommodated.

The Procurement Academy concept has grown in familiarity and scope over the last five years. The procurement academy concept was expanded out of corporate learning and development academies. Many organisations had started to create enterprise-wide online training environments that could host (typically eLearning) content. These were aimed at communicating broad corporate messages such as core values or key policy issues. The opportunity to extend this thinking into functional learning and development meant that departments such as Procurement started to adapt the format, often using the same software tools, to supply-chain specific training.

Many Learning and Development Managers are now responsible for sourcing and development of online content to push onto learning academies, but there is a risk that this reduces the academy to a static knowledge portal. The academy should be the ultimate home of the individual’s learning journey, which may include skills gap analysis and planned activities such as training and on the job learning. This approach supports the 10-20-70 model of procurement learning, where only 10% of learning is formal (such as classroom or eLearning) and the remaining elements are social and informal. The Procurement Academy can support the 20%and 70% with tools like functional social media, knowledge repositories, shared learning events and peer to peer coaching and mentoring opportunities.

The best types of procurement academy enable a match of the function’s capability development progress against the desired capability profile of the organisation, as set by the procurement leaders. In this way, it offers assistance with succession planning so that individuals who could be candidates for future roles receive appropriate interventions to progress towards them. If we neglect succession planning when building the academy, we could end up recruiting solely externally because we failed to adequately develop internal candidates.

An effective procurement academy will be the host of multiple learning modes, but most importantly will emphasise and record self-directed learning activities. It may link to human resources and payroll tools so that line managers can track the continuous professional development of their staff and the associated career progression and rewards.

What is required to start building an effective procurement academy?

• A capability framework that describes the range of skills required across the department and the different levels of proficiency that may be relevant (depending on role type, location or category). This global infrastructure ensures a common landscape for skills definitions and targets.
• A future skills profile and what achieving this will mean for the organisational objectives. For example, a profile of problem solving behaviours that emphasises financial literacy could cost analysis and value engineering skills will contribute to a goal of improved cost control.
• Expertise to build or source suitable content. Content may be a mix of internal and external originated, so it is not only “bought in” but also “home grown” by practitioners. Ideally, content development should be part of the objectives of buyers so that procurement process development is rewarded and recognised. This helps to build processes that are built on real-life category experiences rather than a third party’s generic approach.

The final key success factor for procurement academies is to recognise that the concept builds and grows as engagement and understanding develops in the user base. It is better to quickly get some content in the academy environment that is meaningful and used. It is then possible to monitor take up and understand the response, building more content and functions as required.

It was reported in November of last year that Pepsico had removed marketing procurement support from the business. This resulted in anxiety from the procurement community, in both marketing and non-marketing teams. If removing procurement support is successful (and we could debate what “success” could look like), then does this imply that the procurement function is no longer required?

The ADR Europe team recently supported a procurement effectiveness review for a public sector organization that disbanded their procurement function some years ago. In this environment, business stakeholders were specifying the need, designing solutions, engaging suppliers and contract managing. The outcomes were impressive: lean operations, rapid response to changing customer requirements and careful budget management. This would support the argument that a procurement function is not compulsory to achieve value through supplier management.

If your organisation is considering removing procurement support from one or all spend categories, I would recommend checking 3 things first:

1. Know what Procurement can and does contribute

If you are trying to figure out if your procurement team is adding value, you need to know what that value is and how to measure it. Start with the big picture – is your procurement team contributing is to your organisation’s financial performance in terms of revenue growth, operating cost reduction and capital efficiency?  Most importantly, are business stakeholders and suppliers satisfied with the value offered to them by the Procurement team?

Then consider a category-by-category review. Maybe some categories have already had the benefit of rigorous procurement effort, where application of the strategy has driven the price down through competition and then reduced total cost through collaborative efforts. Now what remains is supplier management for incremental performance improvement and innovation. Who is best placed in your organisation to do this, operational contract managers or procurement professionals? If you still have less mature categories that are still on a journey to full value realization, it may make sense to retain dedicated procurement expertise.

2. Discover if the capability of your people matches the business challenge

Some buyers are perfect for volatile market conditions, some buyers are brilliant facing entrenched monopolies. Great buyers can learn and apply skills quickly, depending on the situation. But they can only do this if they know what skills are required in that situation so managers should check if this is the case. When planning skills assessment, managers need to think 3-dimensionally to ensure that they are measuring competencies against what is really required for the category right now, not just gaps against generic job profiles. This is just as relevant in organizations where procurement is devolved. Even if supplier management is only a small part of the job, business professional needs to understand techniques to optimize that element of their work. Networking with colleagues, observation and discussing lessons learned with peers are all valuable “on the job” learning activities, but they do require advice and direction to make the most of the experiences.

3. Consider whether you have the right supplier management infrastructure

Even if you have no requirements for “buying” (perhaps because of an existing catalogue or long term contract arrangement), there always exists the need for expert supplier management. Supplier management activities include performance management; handling end customer expectation and extracting more value from your ongoing spend with suppliers. These tasks often already lie with functional stakeholders who are either unaware of the full depth of responsibility or unable to accommodate it alongside their other work. Whoever performs supplier management, the correct enablers must be in place such as analytics that support decision making and contracts that address supplier performance management.  If professionals are supported to understand and use these tools, any function can successfully deploy them.

There should be no rush to carve marketing procurement away from the main procurement team, or to question the purpose of procurement as a function.  However, procurement should not hide away from the need to identify and deliver benefits through ongoing supplier management. If organizations can survive and thrive without centralized procurement, the urgency of providing measurable value is now more relevant than ever.