Shocking lack of Professional Procurement in Australia

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Author: Jeni Christensen MCIPS MSCM

Many recent articles have raised further awareness of the shocking lack of professional procurement. Several of these published articles also note the perceived low levels of preparedness of procurement leaders in UK, together with their lack of understanding of their requirements in regard the new Modern Slavery Act 2015.  Personally, I have read the CIPS Knowledge Guide ‘Modern Slavery Act 2015’ and this is informative, summarises the Act well and attracts 1 CPD Hour for your reading and knowledge gained.  This is a definite step in the right direction in regard to the social factors for UK (including my homeland Scotland).

However, I believe here in Australia we’re lagging behind in regard to professionalising procurement, we need to step-up and recognise ‘Procurement’ as a true Profession – not a finance add-on and encourage companies to appoint more Chief Procurement Officers (CPOs). We need to articulate our value proposition, benefits realisation, celebrate success and relaunch the procurement brand.

Australia, we need to ‘Professionalise Procurement’ and raise awareness of the value Ethical and Sustainable Procurement.

How do we do this? 

Step 1 – Remove the stigma that Procurement is about savings and cheapest price. Let’s promote the ‘value’ of professional procurement and demonstrate procurement excellence, through continuous improvement methodologies.

How does professional procurement differ?

  • value-for-money (not cheapest price);
  • open, transparent, fairness, integrity and professional conduct;
  • risk management (inc. reputation risk and accountability);
  • celebrate success;
  • due diligence and conflict of interest (particularly, when on-boarding suppliers, promoting longevity and reduced risk);
  • contract management (benchmarking, benefits realisation of the resultant contract) – not just savings; and
  • detecting and reporting of procurement fraud (don’t wait for the Ombudsman or IBAC)!

How do we get there?

  • Employ ‘qualified’ Procurement Professionals and ensure ongoing Continuous Professional Development (CPD) and training programs for all Procurement and non-procurement staff involved in projects.
  • Procurement Policy & Procedures (embedding Ethical and Sustainable Procurement) for good and/or services – inc. capital and ICT projects including Environmental Sustainable Design.
  • Professional Code of Conduct (inc Ethics) – Procurement Ethics go beyond mere compliance with guidelines, policy, laws and regulations. Ethical behaviours embrace open, transparent, integrity and professional conduct – which are essential in continued fair and competitive process.
  • Procurement Systems (e-procurement, contracts and relationship management), including benchmarking and reporting.
  • Ensure Conflicts of Interest and Confidentiality declarations on all projects, not a one-time event on commencement.
  • Embed Probity and Procurement Fraud training, for non-procurement staff involved in projects.

Let’s raise the bar on professional procurement and take a deeper dive at the benefits of ethical sourcing and sustainable procurement, including but not limited to:

‘Social/People’

  • Labour Standards (International Labour Organisation)
  • Health & Safety

‘Environmental/Planet’ 

  • The Environment

‘Economic/Profit’

  • Business Ethics
  • Value-for-Money (not lowest cost)

Target: A Chief Procurement Officer at every boardroom table and finally move Procurement from the back room to the Boardroom! Let’s promote Professional Procurement!

PASA has declared 2016 to be ‘The Year of Entrepreneurial Procurement’. This theme will be reflected across the business as we focus on a new way of thinking and encourage different skills and attributes in the people working in procurement. Read more here:
http://www.pasaconnect.com/2016/01/2016-the-year-of-entrepreneurial-procurement/ 


Reference links:
http://www.cips.org/en-AU/supply-management/opinion/2016/march/lets-make-2016-the-year-of-sustainable-procurement/

http://www.themandarin.com.au/61980-restoring-vps-reputation-step-one-teach-ethical-leadership/

About Author

Procurement and Supply Australasia (PASA) is the leading provider of information and education to procurement and supply professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, awards, plus various community and network building activities. PASA is a trading name of BTTB Marketing, for many years recognised as the leading producer of conferences and events for the procurement profession in Australia and New Zealand. Whether producing under the BTTB, CIPSA Conferences or now PASA brands over the last ten years, our events have consistently led the market in terms of both educational and networking opportunities.

5 Comments

  1. nice summary, would have liked to see a connection to the “Slavery Act” in terms of why/how this is an issue for Procurement, particularly in Australia. In terms of readability it lacks what the playwright David Williamson calls “the so what factor” – for every sentence, why is this important – “so what?!”.

    • Maybe we could co-author a new approach incorporating the newly published ISO20400 Sustainable Procurement and how we continue to elevate procuement within the C Suite and get this and the Modern Slavery Act on the Vic Gov Agenda in 2017

  2. Indeed shocking. I have done some business in Australia, and I can imagine that Australia being a rather closed market, the procurement profession has taken a different route than for instance in Europe with a many country open market with lots of competition. However, I have learned a few things on the professionalization of Procurement that is NOT working out so well:
    Since the professionalization of purchasing late 90s, “fighting” purchase for recognition, a
    place on the management board and a strategic role as a “profit center” 15 years later,
    articles and discussions among CPO’s are still on that subject and it shows insufficient
    progress.
    through an almost religious focus on people’s behaviour and the related needs of the
    business we have succeeded in allowing Purchasing an undisputed contribution to the
    success of the company.
    This was achieved by not isolating purchasing as a discipline with expertise, but by merging
    procurement with the business. Not to convince, but to cooperate. No models, but results
    and above all, letting go of what procurement is or should be, but from the business
    reasoning insight into opportunities and risks. It is my strong believe and experience that by professionalization, procurement is set apart.

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