Interview with Bettina Rønn Laugesen
I have spoken with Bettina Rønn Laugesen, who teaches at NSCCM's latest course on Procurement.
Bettina has almost 20 years of experience in the field, and has worked at all levels from department manager in Procurement and Production over Procurement Manager and strategic management to Global Procurement Manager in companies and organizations such as Gyldendal, Tryg, Canon and SimCorp. Today she works as a self-employed Management Advisor.
Bettina, can you briefly outline the developments that have taken place in the last 15-20 years in the field of Procurement?
In the last 15 years, there has been a process of maturation within Procurement, and today it is becoming an area that many companies work professionally with.
Previously, the procurement departments focused on simple, operational procurement, and especially on what savings could be made. This trend has been reversed, and today Procurement is seen to a much greater extent as a value-creating than a saving function. Yes, more and more companies fortunately see procurement as a "value adding" function that contributes positively to the company's EBIT.
What do you see as the biggest challenges within Procurement?
Unfortunately, there are still many companies that have a one-sided view of Procurement, where tough price negotiations, savings and price reductions are paramount, while other values that procurement also creates are not made visible and valued sufficiently.
Can you elaborate on what other values it could be?
Yes. There are some in particular that I would like to highlight:
Be it ensuring the good dialogue with the suppliers, so e.g. delivery risk decreases.
It is also important to ensure good purchasing agreements, as well as good SLAs. Custom service agreements are worth their weight in gold.
You mention the good dialogue, can you elaborate a little further?
Yes, the good dialogue and the good relationship are connected, you have a good relationship , both parties will do a little more to make things run smoothly. If you have a binding collaboration that is also about development, it is of course also valuable to explore the possibilities with the suppliers for optimized production methods or changed specifications.
It is crucial to have a respectful collaboration - it is important to find a balance so that you as the buyer do not get too hard, then the supplier can feel "run over"; on the other hand, it is also important that one is not too lenient, then the supplier may lose respect. But I think everyone knows that having a good collaboration with a supplier, someone you can call if it burns, and who you trust can and will step in.
What about internally in the companies. Is there anything you can work with?
Yes, also internally in the company, it is important to ensure the good dialogue, so that e.g. are the right specifications purchased. At regular intervals, it is necessary to go through the processes and make sure to avoid unnecessary expenses. One can also challenge the internal stakeholders to reassess needs and specifications.
What do you see as the biggest strategic challenges?
The biggest challenge I see right now is to lift the departments to the next level, so that companies utilize the full potential of a well-functioning and professional Procurement department. It's like a double-edged sword. Often, Procurement, on the one hand, is not represented at C-level in most companies, and on the other hand, some Procurement departments may not even have been good enough to make their successes and results visible.
In addition, it is harder than ever to attract new and skilled employees in procurement. Qualified employees have become a scarce commodity because demand has risen sharply in recent years.
What do you think management and Procurement departments can do to move forward? What should be the next step?
Hmm, it becomes very generalizing, all companies have different starting points and maturity levels. That said, it is first and foremost hugely important to get Procurement on the agenda of management, and find the key values.
In that process, it is both necessary to establish a good collaboration between the management and the Procurement departments.
In order to make value creation visible, it is fundamental that there is alignment with management about which values are important and then set up KPIs for these. A good way to do this is by preparing a Dashboard which is updated regularly so that progress and results are visible to everyone it may be relevant to.
This gives you the opportunity to create the good success story around the results, which in turn means that you can get speaking time in C-level and acceptance and recognition in the company in general. It's like rings in the water.
Thanks to Bettina for the answers. At NSCCM, we look forward to her upcoming courses.
Britt Torp Pedersen,
Education Coordinator, NSCCM