Source recently hosted a roundtable discussion for people with responsibility for the procurement of consulting services. With 15 large corporations represented in the room (whose collective annual spend on consulting services is somewhere in the region of £1bn) an interesting debate was had about the future role of procurement, as well as a discussion about some of the pertinent findings to procurement that have come out of Source’s research during 2012.

For a number of years the consensus has been that the procurement of consulting services is a maturing discipline, but our opening question was: is it maturing quickly enough? With a growing amount of anecdotal (and some qualitative) evidence suggesting that procurement may have hit a glass ceiling in the consulting category, we challenged our participants about whether the function really is moving onto a more strategic footing, whether the dream of procurement involvement in the full lifecycle of a project is any closer to becoming a reality, and whether the all-important bridges between procurement and the end customer are really being built.

A number of views emerged and were debated:

1. Some attendees noted the emergence of procurement ‘experts’ in other areas of the business. These are typically ex-consultants with procurement experience, who have been brought in to play a role in negotiating and defining relationships with consulting firms. Where that’s happening, by the time a project hits the procurement department’s desk it’s difficult for procurement professionals to do anything other than dot the i’s and cross the t’s. The suggestion was that, rather than trying to fight this, procurement should embrace this new way of working.
2. Procurement’s existence is still justified by its ability to cut costs, making itdifficult to do anything else. And with a small number of people in this role, trying to do anything else becomes an uphill battle, whether or not there is a desire to do so.
3. It is difficult to convince senior decision makers that procurement should be involved during the purchasing process. A CEO might not buy his own stationery, but there’s a lot more at stake in consulting projects and they’re likely to be uncomfortable relinquishing control.
4. It is a very tough category to control as there are so many people buying consulting services and people are often making quick decisions. Participants also recognised that the existence of relationships with consultants is an advantage to their organisations and that attempts to control them could stifle important opportunities for idea generation, not to mention free advice.
5. It is almost impossible for procurement professionals to see supplier relationships in totality:a Big Four firm, for example, might work across different areas of the business, making itextremely difficult and time consuming to build up a complete picture of how that firm works within their business, what investments are being made with them and what discounts are being given. This in turn impacts procurement’s ability to map out supplier relationships or be involved at the right stage when it comes to which supplier to use.
6. Procurement should have a different mindset. It’s not a strategic category, it’s actually tactical. Strategy is driven at a very senior level and procurement should learn to accept this fact and work with it.
7. Procurement departments in many organisations have been handed a mandate to reduce spend, meaning that everything has to be approved by group sourcing before any end user can procure the services of a consulting firm. The consensus was that tougher economic conditions have contributed to this new level of control. The question in people’s minds was whether the value their organisation got from consultants has diminished in anyway, given those strict controls.
8. Has procurement come full circle? Procurement used to encompass many more elements – supplier relationship management, performance management, transactions. It then separated into different areas but it seems to be coming back to this combined approach. But our participants questioned whether procurement managers were really the right people do be doing things like performance management.
9. A common feeling amongst participants was a sense that the business they serve don’t believe they’re doing their job properly if savings don’t visibly come off budgets the following year.
10. There is a recognised problem with people moving in and out of the consulting category too readily. Most people seemed to agree that it’s very hard for procurement managers to have enough credibility to advise senior stakeholders about their use of consultants unless they’d been in their position for at least a couple of years.

Source plans to continue organising quarterly roundtable debates for procurement professionals. To receive notifications of future events, please email alice.noyelle@sourceforconsulting.com