On the day of A-level results, news reports have announced record results have been achieved yet again, with the 27^th year-on-year increase. The scramble for university places begins, and in a few months students will be embarking on their path to graduation and future careers. 

It is interesting to see that although the pivotal role procurement plays within many organisations has clearly been recognised amid such gloomy economic times, that a procurement career is perhaps not at the forefront of many higher education students' and graduates’ minds.  

Steps to promote a career in procurement are being taken with the introduction of the Government Procurement Graduate Scheme (GPGS) and some private sector organisations are promoting relevant supply-chain graduate programmes and procurement recruitment drives, clearly marking out the path towards CIPS qualifications, which is promising to see.  

Let’s hope that graduate talent will continue to enter the procurement profession and that their career path to get there becomes a little clearer to see.

High-street retailers are realising the effects of the recession with damaging levels of consumer spending, and spend-savvy consumers choosing online shopping to save time and hunt out a bargain. With online spending forecasted to rise by 13.3% during 2009* to a substantial £20.9 billion, consumer choice and in turn competition between online retailers is increasing.  

Online spending is also predicted to reach £31.2 billion by 2013* accounting for 10% of all retail spend, which means more and more leading high-street retailers are turning their attention online. The competition is hotting up with free delivery and keen pricing at the fore to attract and retain those savvy shoppers.  

With this e-retailers are facing tough competition from the high street’s purchasing power and leading brands, making those investments into efficient purchasing all the more crucial. 

*according to the Verdict research UK e-Retail 2009 report

The MP expenses scandal has caused outrage and disbelief through the nation, with extravagant claims including refurbishing second homes, purchasing cinema systems and maintenance of moats coming to light.  

The battle to obtain these expense details by freedom for Information campaigners has demonstrated to what level expense claims can be taken to, if appropriate checks are not made; although these are somewhat extreme in comparison to most organisation expenses.  

It does still raise the question of how visible expense claims are in your organisation and what controls and measures are in place for the expense allowances of your employees.  

As seen in the MP scandal, not every employee will make fraudulent claims or take maximum advantage of expense allowances, but by introducing or refining your expense management systems and procedures will achieve control and transparency before you have a scandal on your hands.

If 90% of an organisation’s customer base said they found dealing with elements of the business difficult, it’s hard to imagine a turnaround that could pull back customer confidence from such low ebbs, but this is exactly the challenge currently facing SAP after a recent survey by Macro 4 discovered that 90% of SAP software users considered IT upgrades a “challenge”.

The main concerns relate to time, complexity and resources; so the same old story for ERP customers everywhere. With support ending in 2010 for older versions of SAP, however, businesses are left with scant choice – except in the scope of the upgrade they select. Which is why we are seeing so many organisations concentrating their SAP upgrades on core system elements, and looking to best-of-breed providers to deliver the peripherals, such as procurement.

On-demand systems that fit seamlessly alongside the core SAP financials deliver more quickly, cleanly, cost-effectively and above all intuitively from an end-user perspective. So whilst a couple of years ago many organisations simply said we’ll have it because it’s SAP, in an uncertain economic environment it simply no longer makes sense.

Speaking to Supply Management.com recently, LG announced their aim to be “the best procurement organisation in the world” over the next 3 years – a bullish statement, but one they certainly appear to be backing with investment into their procurement personnel.

The business is creating a buyer bootcamp for procurement training, with the aim of helping LG realise its goals for savings of up to 20% in general procurement, representing a reduction of £1.4 billion in indirect spend alone. Huge resources – and consequently huge savings potential make this kind of programme possible for the Korean giant, but what hope for the majority of organisations which don’t have the capacity to invest into such an exercise?

Fortunately there is a wealth of information available from sources including the Chartered Institute of Purchasing and Supply, or by looking at best-practice guidance through technology. Many source-to-pay system vendors also offer consultancy services, seminar sessions, webinars and round table discussions on industry relevant subjects.

Information and guidance from a wider range of sources also ensures subjects are topical, relevant and selected dependant upon current demands, time and personnel. And all without the blood, sweat and tears of boot camp!

The first five episodes of The Apprentice have seen success-hungry hopefuls predictably fail during their tasks and under boardroom scrutiny. Yet what stood out in 3 out of the 5 tasks were the spend management failings of such supposedly business-savvy individuals.

During episode 1 Anita Shah was given the role of controlling the Girls team spend, and came under serious fire from Sir Alan after she congratulated the team for coming under-budget when purchasing their cleaning supplies, yet didn't question the necessity to spend the majority of the budget. In episode 4 Paula’s team confused the cost of sandalwood and cedarwood oils, leaving the team shocked to find out they had spent £700 not the £5 that they originally thought! Regardless of the fantastic beauty products they managed to produce and doubling their prices to compensate, this mistake left them with a deficit.  

Lack of spend management and control can impact upon profit as any procurement professional knows. Let’s just hope the remaining candidates’ cotton on that unless the team leader is in control of their team and its spending they’ll be heading out the boardroom door.

Online sales continue to defy the high street doom and gloom with spending up by 13% in comparison to last year’s figures, according to the eRetail Sales Index recently published by CapGemini in accordance with IMRG. 

The alleged reason for this increase in online spending is because shoppers want to avoid impulse purchases (usually made on the high street) and take the time to compare prices and plan their spending.  

A similar exercise is being carried out by many organisations that have turned their full attention to spending and savings. This approach to spend management can easily be conducted with the correct functionality of a purchase-to-pay system, where contracts, terms, prices, discounts and budgets can all be managed accordingly.  

Having clear visibility of spend is imperative for any procurement team and when looking at numerous suppliers a clear comparable format is essential.  So taking a leaf out of the spend savvy consumer its time to stand back and compare.

Over £26bn in payments were made late last year according to recent statistics from Bacs; an increase of 40%. Small to medium enterprise businesses are those most badly hit, facing increasing problems receiving payments from larger companies.  

The government have been taking steps to prevent this with changes to the Companies Act. Organisations now have to outline their payment policies to demonstrate if they are paying suppliers on time, but if this process happens in reality is another matter.  

Even with a visual on this information this then surely poses a bigger problem for the supplier as they have to then decide if the contract opportunity is worth the possibility of delayed payments, when cash flow is critical.  

A difficult time for all, and although it’s obvious as to why larger organisations are delaying payments many SME’s now going out of business due to issues such as these. This will only continue to reduce the supply pool – adding further to an already difficult situation.

SAP’s foray into Software-as-a-service has not been as high impact as expected, but according to their statements issued to the press in the last few weeks, their investment and plans are continuing.  

A measured rollout is underway across selected customers across the globe and increased functionality in the format of Feature Pack 2 is due for release later this year. All well and good, but a somewhat staggered, and lengthy approach, suggests there is still a long way to go. 

There are many best of breed vendors already in the marketplace that have the functionality, investment and solutions available now. The benefits of Software-as-a-service are clear and with SAP dragging their heels up to the cloud, in current economic conditions, can you afford to wait?

Conventional wisdom has long held that a 12 round contest between diesel and petrol engines only ever produces one return on investment winner for the fleet purchaser. But when wisdom becomes conventional it often means it’s time to review your assumptions, and research recently carried out by Parkers – the automotive valuation service – puts a lot more punch in the petrol corner than you might suppose. 

Diesel engines have always given a better mpg return than petrol and back in the days when diesel was cheaper than petrol, paying a higher price for a new diesel vehicle made economic sense since that premium would quickly be recouped through the lower running costs. But perform the same calculation when diesel prices run typically 10% or more higher than petrol at the pumps and it can now take years – in some cases up to 25 of them – to break even on the extra investment!  Take a look at Parkers’ calculator tool http://www.parkers.co.uk/cars/petrol-vs-diesel/ for some quick comparisons on model and engine size and you might be surprised at the results. 

So the key message once again is don’t fall into a purchasing habit that is based on historical preconceptions – they may no longer apply. Regular reviews of spending and the value proposition in every procurement category must be at the forefront in current climes.