Year-end in #Procurement
Year end is especially frantic in the Procurement profession. With many contracts starting beginning of the year and stakeholders keen to use up remaining budget, there is a great deal of activity during the last 2 months of the year. Not to mention that many of us also have a flurry of private “Procurement” activity to prepare for Christmas. So here is looking back to some of the typical Procurement life in December:
Supplier Christmas gifts
This is something that has been in decline over the last few years, with shrinking give away budgets at the suppliers and increasingly strict corporate policies around accepting gifts. Still, gift baskets, desk calendars and more still arrive. Many suppliers also hold some Christmas drink event in December. Common sense and following the policy ensure this does not end up being a mine field. Fact is, most gifts fail to be memorized and events are too many to attend.
Many annual contracts end 31 December and so there is a rush to get all the contracts renewed on time and annual purchase orders issued. This is crunch time for Procurement and Legal to ensure timely renewals of the contracts. Hopefully, a suitable contract management tool has given transparency on the number of contract and specific documents that were in need of renewal, so efforts could be started early on to issue new templates to the suppliers and negotiate terms for the new year well in advance. In the real world, the contract pipeline is often murkier and surprises close to Christmas not unusual.
Budget spending spree
Many stakeholders are looking to use leftover budgets before the year end or are at risk of losing them next time around. Also, to ensure that the right annual budget is hit, the Purchase Order has to be issued on time. A number of those business partners are only ever involved with Procurement activity or raising a PO at the end of the year and in need of more hands on assistance. Procurement Managers find themselves having to support the operational team and give hands on guidance in order to make it happen on time. At the same time, there is the stress of challenging requests which are obvious “using up leftovers” and ensuring money is spent on required goods and services rather than just to use it up.
With annual performance reviews looming, savings numbers need to be finalized and signed off. With increasing scrutiny on reported savings numbers, savings approval processes have become rather more laborious and involve several parties that need to sign off on them, usually including Finance and the Business department using the service. As with anything, not leaving negotiations and the related sign offs to the last minute, unless absolutely necessary, is ensuring a more stress free year end.
Annual performance reviews happen either in December or January. At the very least, you need to ensure that review dates are firmed up with your team before year end and you take some time to reflect on your own accomplishments in the last year and take notes to support the discussion with your manager. Procurement is still heavily skewed towards savings as a main metric for performance, but it’s important to look at all the other elements that make for a good Procurement Manager and check what you have achieved. Internal stakeholder, colleague or even supplier feedback can be great to get a more rounded view of how you have been perceived and where you can develop next year.
Finally, be clear when the hard cut off dates for Purchase Orders and contract requests are and stick to it. You want to enjoy a well-deserved break and support functions will also have a cut off date. The internal stakeholders should be communicated those clearly and know that post date xx there are no more last minute Christmas gift purchases at the gas station shop nearby so to speak.
With all the year-end rush and stress, both private and at work, it’s important to take time to take stock, not just of the achievements against the set targets, but also look at how happy you are in your current role, what new skills you’d like to develop and what additional, maybe cross-functional, projects would motivate you next year. Maybe the answer even lies in a new role or new company to join – or setting up your own business?
Whatever the conclusion is, also take time to say “thank you” to your colleagues, but also to your internal business and suppliers. I have in the past, sent hand written cards to the teams in the countries I was managing Procurement for and it certainly got noticed, rare as those gestures (and old school cards) are. Also share your favourite moments with people and on projects with the team and encourage them to share theirs. Inspiration for the year ahead!
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