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My Favorite Procurement Interview Question I’ve Been Asked

Thank you for reading my second post to the Sudozi blog (if you missed the first, you can read it here). I was recently interviewing for a role to be the first Procurement hire for a company and was asked what was my favorite question I’ve ever been asked in a job interview.

Essentially, I was asked what I’d do to build a best-in-class Procurement function. While there isn’t a right answer to this question - the right answer will depend on a number of factors such as the priorities and size of the company - here are some thoughts on building a valuable Procurement function for a young company that hasn’t had a Procurement hire previously with a focus on the people, process(es), and tools and will reverse the order for my response.

Tools

One of the most common frustrations I hear from company employees  is about their experience navigating the chosen Procurement technology. These are tools not intended for Procurement but being used as the Procurement tool. What are some of these top issues?

  1. Irrelevant questions: Questions being asked that are not applicable to the purchase being made. Do we really need to ask 10 questions about data security when a block of hotels is being purchased? 
  2. Lack of visibility: Employees are not able to see the status of approvals.
  3. Missing procurement functions: Having to navigate multiple tools for one request and manually having to send approval requests. 

 

There are many other ways that using a technology not intended for Procurement can and has robbed time from a company’s employees. This list is far from exhaustive but just a few ways that, historically, using tools not intended for Procurement can be very costly.

 

The new world of Procurement technology has made great strides in making the experience better and more efficient for those making requests and those approving requests. It feels as though this next generation of tools is still in its infancy and are only getting better by the day.

 

Here, then, is where I’d aim for people starting a new Procurement function. I’d look for the tool that best fits in the tech stack of my company and, when needed, can integrate with existing tools to get the most out of the tools while allowing users to, ideally, only use the one to get needed information. 

 

I envision the ideal process being full of automations fueled by data that gets captured by the tool as well as integrations with existing tools. Here are just five examples of helpful automations and other features:

 

  • Timely Contract Notifications: Having contract data captured directly in the tool or having the tool integrate with a company’s current contract database should allow notifications to be sent to Procurement and contract owners at a given period of time in advance of the contract’s termination date. This gives the time needed to decide whether to renew. If so, there’s time to negotiate the renewal. If not, it gives time to choose a vendor to replace the existing one.
  • Existing Vendors: When a requester types in the name of the vendor they want to purchase products or services from, the Procurement tool will first check the company’s list of contracted vendors from the list of vendors that, ideally, are captured directly in the tool. When the vendor exists and, if the request is for software licenses, the tool recognizes that there are available licenses to be assigned, a notification is sent to the IT Ops and only the IT Ops team for this basic request. If no licenses are available for this existing vendor, Procurement and the contract owner would be notified that a new order may be needed.
  • Direct Login Access for Vendors: When a new vendor is approved to work with, the ability to send requests to the vendor directly from the tool such as a request for banking data and ISO and SOC certifications that the vendor can upload directly in the tool that then is fed to the respective systems and/teams that requested the information would save others in the company a great deal of time.
  • Relevant Budget Access: Having current budgets in the tool only visible to those given access by the administrator of the tool can give FP&A and department leadership very important data in the same system where requests are being made.
  • PR Creation Automation: Having the tool integrate directly with the company’s financial system so purchase requisitions can be created and invoices paid against purchase orders without asking people to log into a separate system and answer some of the same questions they’ve already answered is something most of these new Procurement tools can do.

 

Processes

Having great tools in place won’t go far without strong processes. This is where sitting down with a representative population of users of the Procurement process as well as every team involved with approving requests will go a long way to ensure that the right questions are asked and asked clearly and that the approvers are notified when it makes sense for them. 

 

Processes will need to be flexible to treat purchases of varied risk differently - this will show as questions applicable to the risk level and only include the needed approving teams for each.

People

Those first few months or longer will be spent with a single person as the Procurement team. With the foundation of strong processes in place that are continuously reviewed to make improvements and solid tools that enable these processes, the company should be seeing a marked improvement in their Procurement function. Having spoken to a number of users of the process and to members of each of the other teams crucial to the success of the processes should go a long way to having them in Procurement’s corner.

 

One final piece to how I answered that interview question was in regard to negotiated savings of contracts - a question that is given disproportionate time to many of the interviews I’ve had. I do strongly feel that to be consistently successful negotiating contracts, one must have market data from which to arm themselves with. Good market data costs money and negotiations take time. How can one person both save a good deal of money while improving Procurement operations? I’d argue they’ll both be less than ideal but they don’t have to. There are third parties who can actively negotiate on the company’s behalf or, when requested, provide the data needed for Procurement to negotiate effectively. These third parties can be integrated into the process fairly seamlessly. 

 

Savings is a critical component for Procurement, and I’ll dedicate my last blog article to talk about this topic. Chat soon!

 

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