What you are missing?

How big is the skills gap for you and your Procurement team?

Much is written about the inventory of skills needed to succeed in Procurement.  Usually, that is done from a Procurement perspective. We look at general business skills like Communications and Influencing and Negotiations. We look at more job-specific skills, like Category Management, and Ariba competence.  We look at hard vs. soft skills.  All good, but it only takes you so far.  I prefer to look at it from our stakeholders’ perspective. 

A defining characteristic of our job is that we sit in the crossroads of Finance, Legal, and “The Business.”   We reside in that small, dark center of the enterprise Venn Diagram. Our primary role is to understand the needs of these three groups, and somehow balance them all.  And that requires us to have certain facility in the language and skills of those organizations. Let’s take a look at each.

Part 1 of the Series: Legal

In some organizations, Procurement isn’t allowed to touch a contract.  We settle on commercial terms, then hand the deal over to Legal to get it papered. In other places, Legal resources are scarce, and we are forced to largely fend for ourselves, very much at the mercy of the supplier’s paper and legal team.  Most of us fall somewhere in the middle.

Wherever you fall on that spectrum, you need to have a fundamental understanding of certain legal terms and concepts, and you need to understand the principles of red-lining. If you wonder why some words are capitalized and others are not, you might be in trouble. If "best efforts,” “reasonable efforts" and "commercially reasonable efforts" all sound kinda the same, you might be in trouble.  If you don’t know or care why Jurisdiction matters, or what happens in the case of ambiguity, you might be in trouble. Limitations of Liability, and carve-outs?  Conflict Resolution, Arbitration vs. Mediation? It’s a long list.

If you are not a lawyer, don’t pretend to be one. Still, you need to speak the language and understand the principles of contract law if you want to have credibility with your Legal team and have them view you as a partner, and not a nuisance. 

In most environments, there are limited (expensive) Legal resources, and Procurement needs to pick up the slack. Ideally, you put in a system of checks and balances, where you have an inventory of agreed contract templates, including a menu of alternate language choices for each contract element.  Procurement is given the flexibility (and responsibility) of choosing best case, acceptable case, and “needs permission from your boss” alternatives to employ before consulting with Legal. The process of developing that system and library, is a good place to start in building you and your team's Legal skills.

Coming Soon:

Part 2 of the Series: Finance