On this week’s show, Nick and Julia meet Phil Clark to discuss the surprisingly complex world of technology procurement, and why it’s a profession almost nobody plans to enter but many find genuinely engaging once they do.
Phil walks through procurement’s longstanding branding problem and CIPS’s efforts to fix it, including the QCD (Quality, Cost, Delivery) triangle game his branch developed for school careers fairs, complete with chocolate-coin incentives. Beyond pitching the career to twelve-year-olds, the discussion gets into the realities behind recent headlines: the scramble to buy 7,000 laptops in the first week of COVID, the Suez Canal blockage as a real-world stress test, and why “cheapest wins” is the wrong mental model for anything more sophisticated than paperclips. Procurement, Phil argues, is the mirror image of sales — the same skillset facing the opposite direction — but with arguably greater bottom-line impact.
The richer territory is forward-looking. Phil explores how procurement teams are starting to grapple with AI contracts: what happens when an AI bot replaces a thousand jobs, and how you contract for the ethics of training data. He looks at Y2Q and the need to bake quantum-safe expectations into multi-year deals, and reflects on the catch-22 of preventive work — good procurement means bad things don’t happen, which makes the value invisible. The throughline is that procurement is genuinely strategic work for people who enjoy complexity, relationships, and thinking several moves ahead.
Show transcript auto-generated by Descript
Nick: Hello and welcome to episode 348 of the WB 40 Podcast with me, your host, Nick Drage, host Julia Bellis, and our of guest, Phil Clark.
So first of all, Julia, what have you been doing over the last week?
Julia: Do you know? I always know you’re going to ask me that question and then I struggle to think of interesting things that I’ve been doing. But actually I have had an interesting week. I went up to Durham for work to run a few workshops and my main job actually was doing the icebreaker. historically I’ve been rubbish at icebreakers, but I’m getting a bit braver now and I’m taking risks and I’m doing silly things. And I got the team to do a one word each story, so give them a problem to solve. Everybody says a word. Let’s see what happens. And the best one was, the problem I posed was how might we make more friends? And they came up with on the spot, should dribble less, which I thought, nailed it. You got the brief there, absolutely sorted. And then I came back from Durham and promptly caught a terrible cold. So you can probably hear me being a bit huskier and croaker than usual.
Nick: Extra as SMR for our listeners.
Julia: There we go. What about you, Nick? What have you been up to?
Nick: First of all, impressed at taking on icebreakers everybody’s nervous and some icebreakers can be just so cringeworthy, it can set a bad tone for an entire workshop. But doing something like that and also expecting people to be like, who show made slightly, whose line is it anyway, kind of level of improvisation, but if everybody’s doing it that just sounds really fun and a way to get everybody to get over themselves and talk to each other.
For me, I, yeah. I also, yeah, know this question’s coming, written things down. The honest answer is cutting down some unruly bushes in my garden, small garden, which makes me realise I want to live in a forest and just how to make that happen. Just, yeah.
Julia: Do you know, in my experience, every woman hits mid forties and wants to live in a forest so you can join all the women who’ve had that
Nick: It’s, I like I’m just ignoring a guest and trying not to derail the conversation, but there’s something to that idea. Now you’ve really got me thinking about that. I shall, I should just put star next to my notes and we’ll see if we can do a separate episode on that. We’ll.
Phil: keen to explore this. Want to live in a forest thing though, ’cause that, that, so you enjoyed cutting down the bushes, is what you’re saying?
Nick: Not really, but they weren’t one of the trees, wasn’t that health one of the trees or bush or whatever. I don’t understand biology at all. I just enjoy being around it.
Is, was a bit dead. Like you could literally pull the tree apart. I mean by tree, something that’s three, four metres high at most. But because it’s nature and it doesn’t obey like the borders of the property or fences, they had to come down. Otherwise it was, I need to remember every couple of weeks to stop that blocking.
For example, one of my neighbours, it blocks the sun, which isn’t fair with summer coming up. So I didn’t really enjoy taking ’em down what it needed to do. But I like that idea of being in nature partly for the choir, partly just ’cause the way nature works is really interesting. And so seeing it firsthand can is really interesting.
If it’s your own, then you can study it and play with it. Like cutting these bushes back before I was really interested in how they fought back and which, what grew back where, all that kind of thing. So that’s one thing I’ve done. Also moved from one ISP to another, like a good or bad habit.
I’ve been self-hosting some online services, some at home for, geez, 25 years and just doing that and the way the internet has developed is something I just loads of thoughts off that. And that’s something else I’ve been doing. And also, as we discussed before we started recording I should be running a business.
Lots of half thought conversations about that, including I might become a part-time Viking sage, which is both really interesting suits, my beard. But also if you look up Viking Sages and I researched it for two minutes, they usually end up beheaded according to the mythology and the history. So I’m, I’m not, I’m considering the position at the moment.
So that’s what I’ve been doing over the last week.
Julia: Fighting and poetry are the strengths of the Vikings, so if you’re up for those things, I think you should go
Nick: Oh no. Horribly. I’m up for, I’m up for instructing how other people should fight and being unimpressed by poetry mostly, if I’m absolutely honest. So it seems that profession’s looking less and less likely by the minute
Julia: I think we should ask our guest what he’s been up to this week.
Nick: I think. I think we should, and I think, I don’t, we’ve either set the bar really high or really low. I’m not sure.
Phil: Over the last week I’ve done a bit of work stuff. Boring, went and talked about that, but a friend of mine does ultra marathons and so I was crewing for my mate as he ran up Snowden with 2000 other people
Nick: Oh, nice.
Phil: which was horrendous ’cause the weather was awful and of people got quite cold and wet and yucky and it was all a bit dangerous, but, so yeah, that’s my thing.
But it sounds great. My job was really driving him to the start line and sitting in a coffee shop for about 10 hours, eating cake and then picking him up at the end, which I’m perfectly happy with. And the Wales one wasn’t so good, but he does these quite frequently. So the next one in the summer is in the Pyrenees.
And then in September we’re going to niece twice. So yeah get a friend who does ultra trail marathons. You don’t have to worry about cutting bushes back.
Julia: are a good friend. Actually, I
Phil: it’s not that hard, honestly. It’s great fun.
Julia: I bet you he was delighted to see you in a warm, dry car
Phil: Yes.
Julia: end.
Phil: Put.
Nick: Brilliant Ray. Thank you everyone. That’s just the introduction done with. Now we’ll get on with the show.
, In the last podcast, I was silent for the first 20 minutes I was scribbling down side paths and ignoring them. But foolishly WB 40 of left me in charge, which means we’re gonna, we’re gonna go down most of them. But Phil, your background I, how did you get into procurement? How did that start?
Phil: So I, as most people in procurement could say I fell into procurement. In reality so my background, I’ve been in it 30 years. I worked for IB and Accenture, some big companies, mostly on the sort of supplier side. And then about 15 years ago realised that actually the fun bit is not necessarily in my perspective, the technical stuff, it’s more how you use technology in the business.
And so I decided a bit of a career change was required and I moved into being on the sort of client side, the buyer side of technology and helping them develop business cases and the commercials around why you would buy a piece of technology. So that was my first foray into procurement.
But I’ll be honest with you, 15 years ago, I didn’t even know it was called procurement. I was just fancied getting onto a buy side and working on the projects to see how it all worked. But my background was always quite commercially focused. So that’s where I went. And then over that 15 year period, I realised it was called procurement.
I developed my commercial skills, got into quite a lot of detail around some of the specifics of technology that you don’t really think about unless you’re in procurement. So on the tech side of things like licencing, ip, data privacy, those sorts of things that you need to write into a contract.
Developed some skills around that. And then because I was self-employed or had my own limited company, I decided it would be a good thing to join local networks of people. And the most relevant one was the Chartered Institute of Procurement Supply, sips, CIPS. And so got checked to some of those guys and that’s where it led into a more formal procurement role.
That all makes sense, that follow through. Okay.
Nick: Yeah, that’s really good and just. Interesting that you say that everybody in procurement falls into it. Like nobody. Men in the best way. Nobody grows up and thinks I don’t wanna be an astronaut, I don’t wanna be a train driver, I wanna buy things for companies. But also, and this is only an audio podcast, so we couldn’t see Julia’s micro expression there. And men in the best way. Procurement doesn’t seem that interesting until you get into it and suddenly you realise how complex it is and how many different parties and organisations there are involved. I assume that’s the case, is once you start learning about it, you’re like, oh, there’s so much more to this than like shopping on an, a sort of corporate Amazon for my company.
It’s like you started please continue to explain. You said about the legal side, the IP side, the licencing side, the ongoing cost side,
Julia: I
Nick: how.
Julia: when you said legal, I thought GDPR and that alone is a massive, chunk of information to understand and
Phil: and it is interesting ’cause procurement and it is exactly the point. You’re just making procurement’s got a bit of a bad brand. And the Chartered Institute procure sips, I’m gonna call ’em sips ’cause it’s too long to say SIPS are trying to fix that problem. So the reason why I got involved and the reason why I stayed involved is ’cause actually we’re all in agreement.
There’s a better way of articulating what procurement is. SIPS as an entity. Being a Chartered Institute is actually all about driving best practise for procurement and supply across all industries. And obviously you can buy all sorts of stuff. So in my world, I’m very focused on technology procurement, but they look at all sorts of aspects of procurement, but they do formal training courses and if you’re a procurement person, you’ll end up with a sips after your name in some way, shape, or form.
And so they, it’s in their interest to fix that branding problem. And the reason why you guys invited me onto this podcast was to talk about a game that, that we jointly developed because part of the role of the SIPS branch and its volunteers, the function is to engage with young people, school leavers or people still at school to help them wake up in the morning and think I wanna work in procurement and not be an astronaut or a hairdresser and those sorts of things.
And so we had to develop an approach to try and fix that problem. But it’s interesting, we’re fix, we’re trying to fix the problem at 12-year-old level, but here we all are, not presuming any ages, later on in life still trying to work out what procurement is between us all. And not many people know about it, but I’m absolutely passionate about it.
It’s a great job and you do all sorts of really interesting things as part of it. So yeah, far away on questions on procurement. I can talk about it for hours.
Julia: you know, you are selling it to me. I’m sitting here thinking, oh, maybe this is a career change I should consider.
Phil: should be. Everyone. I mean, little things like last couple of years been really interesting from a procurement perspective, tech procurement to one side. I think procurement really came to the fore because you remember a few years ago, some very nice man drove his boat into the side of the sewers canal and everything ground to a halt, and then all of a sudden you couldn’t get any goods from far-flung places to our shops and all those things.
Procurement had to unpick all that on behalf of the business they were operating in. And that’s just one aspect, the logistics side of things. It’s just one aspect of procurement that people just take for granted. But if you’re a procurement professional, you have to think about how to navigate some of those things what the contractual implications are.
So there’s a lot to it other than just buying stuff, which is what people think it is.
Julia: So this event that was beyond the control of most companies put them in a position where they were unable to meet their contractual obligations. Wow.
Phil: Oh, and it depends what’s in their contract. So a lot of conversation at the moment about the travel industry and what force majeure means in the context of people not getting aeroplane fuel so they can, you know, whether they can claim on their insurance. All those things you need to be aware of and be able to navigate as a procurement professional.
Another great example that’s technology related, which is one that I’m speaking from personal experience. When COVID hit, you know, a few days after it was announced, you know, we all gotta work from home. Literally every technology procurement person in the world was trying to buy laptops. And I was working for a large utilities company at the moment,
Julia: Yeah.
Phil: Sorry, at the time.
And I was instructed within a week to go and buy 7,000 laptops in a highly constrained market where, you know, clearly you just need to get it, otherwise quite a lot of back office functions will fall apart. And so the skill of a procurement person in that regard is maintaining relationships with suppliers, being able to secure supply, navigating still not getting ripped off on the price, making sure they’re all good quality, all those sort of things procurement people need to deal with that you just, again, just take for granted things are gonna turn up.
It’s a great, honestly, yeah. Do it change your profession now. It’s a great place to work.
Julia: So, so let’s talk about the skills that you need. ’cause when you were talking about your laptop mission, I was thinking, are you under pressure to negotiate on price? And then you talk more about relationships and supply. And so how much of it is about negotiation?
Phil: So traditionally it was very much, procurement has always been seen as you get the cheapest thing. Yeah.
And I think certainly in a lot of the commodity type procurement categories, not necessarily technology. You know, being able to negotiate a decent price is a really big part of the role. But one of my sort of specialist fields is large IT services contracts are outsourcing and those sort of things.
And whereas price is really interesting, it actually isn’t the main driver. Most of the time you want to, you’re willing to pay a little bit more for something that works. And so understanding what you’re buying, building relationships and trust with suppliers, making sure that all of their commitments are recorded in contract so you don’t fall out over it.
But being able to take a bit of a leap of faith where you need to, all those things are part of the skillset that you need as a procurement professional. It’s not just about looking at three prices and picking the lowest one you need to be a good procurement professional. You need to know a lot more about that.
But it’s cool. And and the nice thing about it is if you think it’s the opposite side of the coin to a sales person and everyone sees salespeople as relationships and, you know, driving profitability, et cetera for their respective organisations, it’s all the same skills in procurement just facing the other way.
Julia: you are spending your company’s money rather than
Phil: and
Julia: something.
Phil: the other thing that I’m, I brought you, I’m off now. You’re not gonna stop me. This is a three hour podcast you’re gonna get. So, so one of my frustrations is if you’re in it specifically, it sales guys get paid very well for, you know, especially in the software side of things. And they sell a hundred pounds of software and the profitability on that is probably, eh, let’s say 40%.
So, so they’ve made 40 quid out of a hundred quid for the piece of software they’ve sold. Great. Well done salespeople. And they get paid a fortune for that. Procurement people don’t get paid as well as salespeople. Some people do, but you know, in the main if they take, you know, a hundred pound software cost and don’t buy it because you don’t actually need it, they’ve saved, they’ve added a hundred pounds directly to the bottom line of that company.
So the value of procurement is significantly more as a procurement professional, in my view, than a salesperson. And I’m now gonna get a lot of hate from salespeople, but it tangibly, you can measure it. Sold. Are you guys signing up yet?
Nick: I’m struck by at least two things.
Phil: I.
Nick: first of all that point, especially that you can buy the right, you can, sorry, you can buy the wrong thing, then leads to all sorts of follow on issues. So not, so making that choice, not buying something and being someone who knows the products well enough and has built the relationships strong enough that you can maybe find that out when another procurement person wouldn’t, because you know, the sales person well enough that they’ll be honest with you and go, I don’t need you to make my monthly target or whatever. Don’t get this. You don’t need it. And it’s not, it shouldn’t be at version one yet. That’s just what we were told to do. You know, although that kind of inside knowledge will save companies much, which is so important and deserves salesperson, like rep levels of compensation. But just also it feels like a game that from my sort of history of serious game design, certain situations and how complex they are and you’re like, I want this feels like something people should play. I know this sounds like a horrible lead into the next subject to conversation, which we’ll see if we go to, but like quite genuinely, when you say it’s it’s this factor, this factor, this factor, rather than it’s just one. It’s who can sell the cheapest? It’s also about relationship building.
Also. There’s multiple parties involved immediately. go to that’s something people should game how complex it is. And also that’s a game in that how interesting. That’s something you experiment with. That’s something you learn about, that’s something you get a about from repeated play.
Like a really good game. Like say something like chess as opposed to tic tac toe. Like to explain the obvious to both you and the listeners that, you know, as in chess is still being analysed after how many hundred or thousand years. Because it’s so complex because it’s so interesting.
The same way something like procurement rather than can I how cheaply can I get this from whoever and how can I just rotate between suppliers to keep getting the cheapest deal each time and not be concerned about all the other add-ons or follow up issues or technical support that’s needed or whatever. It just, there’s such complexity to that. It does strike me as such a area. Which brings me onto the third thought I had while you were talking was someone like you is the best advert for this. I don’t mean to take away from your game, which we haven’t even discussed yet, but showing oh, did, no, this is really interesting.
I’m really into my work rather than trudge through something for eight hours a day, so I’ve got a roof over my head that strikes me as a that’s the best advert for a profession.
Phil: And I mean, it’s interesting. No, yeah, you’re, I mean I love it and I know that will come across hopefully, I think the point you made about the game, and obviously, you know we started talking because of the announcement about the SIPS game that we spoke about. The difficulty you’ve got is the game gets more complex as you, as your career progresses.
And what we tried to do from a SIPS perspective is get people to understand the basics. And so the finishing off the sort of story around the SIPS piece and part of their mission is to bring people into the profession. We were I carry with the intro that we did about 20 minutes ago but hopefully it’ll make sense.
So, so you know, I joined the local SIPS branch and met loads of other procurement people and we all got on famously and there’re a nice bunch of guys and that all really worked well. And that helped me understand procurement and the different types of procurement. ’cause I was only really focused on technology, but one guy buys fire engines for living.
Another guy buys the lights for air fields, people buy equipment for gnats down the road. Been sw so, so there’s all sorts of people buying all sorts of crazy stuff. Anyway, so we as a branch volunteer at local careers fairs because sips want us to bring people through the profession and that’s a good thing to do.
And the first one we went to was in a big guild hall. I lived down near Portsmouth, so it was in Portsmouth. And we all turned up, well, three or four of us turned up in our suits with our boots on, you know, with a table in front of us and some leaflets and, and it said, come and work in procurement behind us.
And that was sort of it. And we turned up at this careers fair. And next to us you’ve got BAE systems, a big local defence organisation you’re probably aware of. They have, they’ve got a missile on their table. And then you’ve got another company next to Ms I, this
Nick: Wow.
Phil: they’ve got buns and burners, you’ve got the Army and they’re all trying on different uniforms.
And we’re trying to explain to 12-year-old people. Procurement’s a really good thing to go into and they’re just all over the place not wanting to come to our table. And it was a massive fail. Yeah. First effort, massive fail. So we took it away and decided that, oh, you know, as a 12-year-old person, what would you be interested in?
You’ve gotta get, well, two things really. They like playing games. So to your point, Nick, you know, that’s a good way of attracting the audience, but just having a game or getting to engage with a game is gonna be quite difficult to do. So we need to make it worth a while. And being procurement, people who do negotiate occasionally, we made it worth a while by having a massive pile of chocolate coins.
Yeah. So we developed a game where they won chocolate coins, but the whole point of this is to try and get ’em away from even everyone thinking, you know, procurement’s all about cost. So the game that we developed in procurement, there’s a really well known tool which people use, which is called the QCD triangle, quality, cost, delivery.
And so the idea is you find a balance of quality, cost, and delivery. And so you, it’s a three pointed thing, obviously triangle and so if you can get in the middle of the QCD triangle, you have got yourself to position, we’ve got a balanced deal because you would be willing to pay a little bit more for something of better quality or a little bit more for something of, you know, that gets delivered a bit quicker.
And so we developed a whole story, if you like, of engaging with these kids to try and get them to understand that don’t just focus on the price of something, focus on the other aspects. And when they get to the end of realising they actually do this in their day-to-day lives when they’re buying a piece of clothing or a mobile phone, then they could be procurement people.
And actually it’s quite good fun to negotiate with some of these bits where it got really interesting, you know, so we play the game and they throw some dice and if they get the same number on the dice, they get some chocolate coins, all very interesting. But where it got interesting was a lot of the kids, and bear in mind these are probably 12 to 14-year-old kids at careers fairs.
You start a conversation around, you know, asking questions about what’s important to you when you’re buying your mobile phone. That’s normally the best way to, ’cause they’ve all got mobile phones, so most 80, 90% of the price, does it have the right data as it can take the right photos? All the sort of stuff you’d expect them to say.
Some of them pick up on the fact that delivery is important, you know, when it turns up are very few of them, more of them actually turn around and say, where’s it sourced from? You know, what, is it a, is it an ethical thing? Quite a lot, but considering sustainability and actually a lot of the stuff that is part of procurement, but I would consider in a game more advanced and there’s no way you can factor that into your QCD triangle.
We’ve got kids now are coming through who are actually starting to think about some of the more complex environmental considerations of procurement without even being prompted, which is actually quite reassuring. And then in my world, especially with the AI side of things, if you forget about QCD, things like ethics and all those sort of things are part of procurement as well.
So if you’re looking to buy an AI service, how that responds to certain situations based on the way it’s been trained and how you put that in the contract and how you make sure you are not buying something that’s gonna be blatantly racist or something horrendous like that. You know, all those things are part of a procurement process in my view.
And so you need kids to understand, not just it’s cheap, but also the ramifications of what you’re doing with that thing are this, and therefore they need to think about that as well. It’s a fantastically interesting field.
Julia: Did your years on the other side you cut out a significant chunk of the learning curve, what did it not help you cut out? What did you still have to learn?
Phil: I, being on the other side, the dark side, the sales side clearly got a very good view of the technology and the operational implications of it. So I went through all the geekery and then I did a lot of services stuff. So having a basic understanding of ITIL and those sorts of things how a managed service works.
Those things are very interesting or very useful. Understanding the profitability that a company makes when they do different services is also quite key and the supply chain within it. So most technology buyers, if you just fall into procurement and not been through the industry, wouldn’t understand that most things are bought from a reseller who buys it from a distributor, who buys it from a vendor, and all those sorts of backend margins and all that sort of thing.
So all that stuff was incredibly useful. ’cause when you’re on the other side, you can play tunes on that to an extent. The bit that I probably didn’t have a very good understanding of when I moved into procurement was how complicated it was to navigate stakeholders. And although I’ve been on the technology side and you know, on the sales side for quite a while, really understanding how or who in an organisation and a business is accountable and responsible for what that technology does, and therefore they are responsible for the buying decision effectively is a real skillset because you just assume if you’re in the sales side, you’re dealing with procurement and they’re the ones who sign the checks.
They’re the ones who sign the contract, therefore, they’re the really important ones. Not at all. You know, the people you want to get involved with are the people who have to make the technology work in their operational unit to deliver an outcome for the business. And that understanding how to find that stakeholder is quite a complex thing to do.
It’s cool.
Nick: I’m gonna jump in right there. Just because of having been worked in cybersecurity on the technical side and having been sold, and again, with we are not, we are officially and formally not denigrating salespeople or their profession, but is that big chasm at times, not always, certainly not always the case, but at times between what’s sold and then what the poor technical people are like, this is what I actually have to do.
So, and almost the sales people are like you push the technical people and they always come through more or less, so why not sell more than they think they can do? there’s that whole issue. Yet from the procurement side, sounds much friendlier because you have to, because procurement doesn’t buy things just for itself, stating the obvious. It has to have a good relationship and understanding of what its internal customers do. Otherwise, the whole process falls apart. And in a way that’s more damaging inside an organisation than a salesperson overselling a technical capability. If you over, if you, I dunno how to put it under purchase service or product, then someone’s left with something that only fulfils half the criteria. That’s just done a difficult ongoing mess that you have to avoid as soon as possible in the hu the whole process.
Phil: Exactly that. And, you know, you very quickly get into dispute if the procurement person hasn’t done a good job of marrying up what the sales person’s desperately trying to sell them to hit their target versus what the people on the other side of the fence the buyers really need. And that gets even more complex when you get into things like cloud and consumption metrics, because nine times outta 10, your salesperson wants you to commit to a bazillion dollars of stuff a month.
And the stakeholder has only got two pound 50. And it’s navigating the, finding the appropriate compromise to keep the salespeople interested, but making sure the business stakeholder doesn’t overcommit based on some promises made by a salesperson down the pub. So it, all these things a procurement person sticks themselves in the middle of all these difficult conversations to avoid the horrible myth that is some sort of contractual dispute later, which ’cause that’s never a good thing.
Nick: It just sounds like a real like I say, this sounds, it sounds like a really interesting game. Like you think of, you think like the military has a big thing of recruiting gamers because they’re very twitchy in the game in sense of the word, and they’ve got quick reactions and they I mean, it has been, I think, proven that gamers can imagine more points within a 3D space at the same time, or can deal with more things happening within a 3D space, which is a point, things like your fighter pilot just because from a relatively early age they’ve played a lot or too much of those kind of games and have just taught themselves to imagine that same way that, taxi driver’s brains change slightly because of what they’ve emphasised.
But also there’s so, you know, games are so wide, there’s so many games, there’s so many interpersonal or social You think of everything from role playing games, the kind of social deduction games people play, which, you know, up to a point, not wishing to compare to like the traitors or something like that but it’s, it’s that kind of thing of I need to figure people out and I need to figure out this really complex situation. So many people do that for fun. Why not it and get paid for it?
Phil: Completely that, and it’s, I think it’s probably a bit more, the reactions piece is not so relevant, but the strategy of a Dungeons and Dragons or a risk type game where, you know, you’re putting in place a five year contract for an outsource, all very interesting, you know, what you want on day one, but in two years time you probably don’t.
And
Julia: that’s,
Phil: over that five years, you could get someone elected to office in the US that could fundamentally change the geopolitical landscape of the supplier that is providing you the services for that. And all those things are part of the consideration of procurement. You need to be a strategist.
You need to understand exactly what you are buying and why you’re buying it and what it’s gonna change in the business context and the political context and the economic context and the social context, all those things. So it would be a great game. I’m not sure how long it would take to develop or you certainly couldn’t put it on a Snakes and Ladders type board.
Julia: it seems to me like yet you have to think about anything and everything that could possibly go wrong and
Phil: Yeah,
Julia: some sort of mitigating strategy.
Phil: exactly. That.
Julia: And do you have standard out the box mitigations or do you have to think creatively for every big deal that you do?
Phil: The, there’s so all procurement, so this whole, the value of sips. So SIPS have got a bunch of tools and they’re fairly commonly known tools that allow you to assess. The political and social environment around certain procurements and they apply to no matter what you’re buying, they apply generically to those things.
There’s other sort of academic tools like something called the IC matrix, which allows you to assess who’s got the power in a particular negotiation. So, you know, all those sorts of things. So you can apply generic principles and generic best practise buying principles to some of those situations. But the re reality is that’s quite academic and theoretical.
You do just need to spend a lot of time with the people buying the thing and make sure they articulate what could go wrong from their perspective. You need to layer on over and above their perspective what the business strategy is. So, you know, what are we likely to sell part of the company in three years time?
Do we need a break clause in three years? Then you take it to a slightly more broader political landscape at the moment. Very relevant. Just make sure that you’re not nailing yourself into a position where you can’t do something about it if the massive landscape changes and there’s really nothing you can do.
So it is, there are tools that are available. They’re very academic and very theoretical, and the trick is to apply those tools and other sort of best practise to what you are actually specifically buying. You know, if you’re buying a commodity, like paperclips, everyone use that, you know, you don’t really care about that sort of stuff,
Julia: Yeah.
Phil: you’re outsourcing your call centre to another continent and then you end up, or that country gets invaded, you know, you need to think about what the recovery strategy is.
All that stuff is quite, it’s cool. It’s really cool. Not for the fainthearted sometimes.
Julia: Yes, I believe you. I mean, even the paperclip scenario, you can envisage things that would happen that would destroy your need for paperclips and you’ve gone out and bought 10 million of them
and,
Phil: Yeah.
And also the, part of the sort of sips concept is obviously the supply chain, you know, so buying paperclips is all very interesting, but paperclips come from manufacturers of paperclips, but they have to buy stuff. They have to buy steel or whatever the paperclips are made out of, you know, that steel has to be shipped from somewhere.
All those things. If your paperclips are critical to your business process, you don’t just look at the paperclip provider. You need to think about all the risks of the downstream supply chain and make sure you’ve mitigated all of those. So, and in technology, especially if you think of, not predicting political events, you’re buying something from Amazon Web Services, you’ve got yourself a server to a large extent, it’s their problem to deliver you that service.
Yeah. But if they put you in an availability zone that has some sort of geopolitical problem, that’s a thing. If they’re entirely dependent on for capacity products that are coming from politically charged areas of Asia. That’s a thing. So all these sorts of things you just need to try and predict, you know, should we be bulk buying things that are likely to be coming outta Taiwan at the moment because something might happen in the next few years.
All that stuff is, this feels very doom and gloom. I’ve headed off into a dark place. But as a procurement professional, if you don’t understand what you’re buying, some of those more complicated downstream supply chain things are quite difficult to navigate.
Julia: That is something that struck me earlier, actually. A sort of natural pessimism could be a real benefit in this role
Phil: Yeah.
Julia: you want to envisage those disaster scenarios and mitigate for them upfront.
Phil: But si similarly, you know, you can have, it’s useful to be optimistic too, you know, so a lot of the more progressive contracts you put in place as a procurement person has some really good gain sharing. So if a supplier over delivers on a project
Julia: Yeah.
Phil: and it gives you a massive benefit as a business, you should probably try and find a way of sharing that with the supplier.
’cause it’s good for them and good for us. So you it’s not just all pessimism it’s actually thinking through the impact of an envir of a situation on the business and how that plays into your buying.
Julia: And then that’s incentives, isn’t it?
Phil: Yeah,
Julia: respond to incentives. You can incentivize good outcomes and
Phil: exactly that. So it’s fascinating. I could go on, I’m not gonna go on for hours, but it could go, I could go on for hours. It’s a it interesting field and the whole purpose of the original conversation, how do you get a 12-year-old to understand the basics to such an extent they want to explore it further such that you then get them into a position where they start looking at the more implica interesting things like ethical buying, sustainability, et cetera.
So proper supply chain analysis.
Julia: You know, just to take the conversation upper level, massively, the number of 12 year olds who love going shopping, and this is professional shopping, isn’t it?
Phil: Yeah. When you turn around to a 12-year-old and say, I spend x million quid on computers last week, and there are a particular, particular gender of a particular interest, they love it. And actually, you know, outside of technology, obviously the fashion buyers are really big things.
I know this is terribly stereotypical, but a 12-year-old is still a thing. You know, a lot of the ladies who turn up, the young ladies who turn up to these careers fairs really wanna get into fashion, haven’t really got the creative brain to do the design side of things, but could still get involved in buying a product that they love and all the international travel that comes with that.
So most of ’em are made abroad so, you know, go and visit different suppliers. So it’s actually, you can sell the job to people based on their interests. ’cause it is generally a avail, generally interesting to most 12 year olds if you can spin it in the right way. But it generally as positives.
Nick: Also, it’s the world they’re in, isn’t it? As much as I, no, not having any children myself, but that the complex complexity of purchasing decisions and the freedom to make them at that age and how important they are and all the different factors involved, feels like they are prepared for this kind of environment and they understand the issues.
And like you said, it’s great to hear from you both. Going back to your example is that you looked around at the other table and said, our method isn’t working. Let’s try something new. It is always good to hear from just anyone in any field now, rather than, ah, the young people didn’t understand.
It’s no, we need to sell this. But also with that in the attracting. There it is that you learn from them in that you were, and also it’s without, again, being too doom and glue. It’s nice to hear someone pleasantly surprised by people younger than them just being like these people have grown up in a much more complex environment than we have had to deal with procurement decisions that affect what they’re able to do and maybe their future opportunities while being bombarded with all sorts of things from the internet is what it’s, is.
Great to hear you I discussed that general situation then it’s they’re, they would really, they’re not only they’re trained for a career in procurement, they would enjoy it too. Is, I’m struck at the intellectual challenge of this. The thing, one of the notes I was scribbling down was there’s the idea of skill matching multiplayer games, usually the kind of first person shooters and so on in that you don’t go up against people too good, otherwise you just spend most of your time res spawning after you’ve died. And it’s no fun, but it’s, if you get better, then you go up against better players and a really good online game and a really good system will get more complex and more difficult as you get better at it. So you’re always just outside of your comfort zone and learning. And while we’re trying not to overtly be just an adver, a podcast advertising the procurement career for this episode that this career sounds like it skill matches you as a person.
Like maybe you find your level and that’s it. But if you’re like I know much more about how this works now and I’ve built all these relationships and I’ve got this experience in the industry, I need to find a harder challenge. career actually provides that for you in that there are opportunities out there to progress rather than I get this now I need to find a different career or I need to just put up with it for however many more years.
It sounds like a really interesting career from that point of view, like a really good game in that it matches your ability.
Phil: Yeah it is, it’s a, you’re right, it shouldn’t be a podcast about driving people towards procurement, but fundamentally I love it. And I think it’s a real, it is got a really broad appeal and it, but it’s as good as you engage it. There are quite a lot of procurement people who just buy stuff, and that’s okay.
That’s what they do. But the career path within procurement is you start off just buying one thing. You then buy a whole category of things, then you buy, not the, not that, lots of categories of things. Then you go up the ladder to buying more and more things. So, you know, a traditional chief procurement officer in a business usually isn’t a board level position.
It’s on the, it’s in the finance function, but it’s still, you know, quite influential. And, one of my. Clients, managers a budget of 11 billion quid, you know, that’s, it’s about 50% of the revenues that they work for. And he has to have oversight of all the different things from x million pounds on paperclips to x billion pounds on facilities that they require to deliver the offices that all the people working.
So it is, you know, you’ve got a really good career path. And it’s quite interesting if you like you can go in any direction. I’ve chosen to go down the technology route primarily because I’ve got a real interest in the sort of technology aspect and how that applies to businesses. And where my sort of 10 to 15 year journey went is learned a bit about procurement.
And now I’m trying to get myself in a position where I understand enough about the technology commercial detail to be able to apply it to any situation. And I think by the nature of the way I’ve gone about my career, I’m actually dealing on more and more complex things, which is the ultimate game for me.
The way my head works chuck me into a really difficult, horrible relationship problem. Or you go and buy some really complicated IT services for a 10 year outsource agreement, that’s my bag. ’cause you have to think about everything. And like you say, it’s in my head, it’s a game.
Julia: I was gonna say technology procurement is relationship heavy, isn’t it?
Phil: Yeah.
Julia: people and outcomes that may or may not be clear upfront.
Phil: Especially in the services field
Julia: Yeah.
Phil: you know, if you just, if you are just buying laptops, I’m not degrading people who just buy laptops. But that’s quite straightforward. It’s a commodity to a large extent, but it, its if you’re buying an outcome, so, you know, a lot of the services, a lot of software these days, SaaS, a lot of the AI related services are all actually supporting a business process.
It’s a lot more complicated. You need a better relationship with your supplier.
Nick: So you I dunno how to put this. You’ve, I was gonna say a tendency towards the horrible in that
Phil: Complex, I’d say complex Nick.
Nick: Let’s say complex, I’ve got a mental image of the running towards the fire. It’s like everybody’s going, no that looks a bit hot. Let’s go away, get away from it.
You’re like, oh, that looks like that needs dealing with. So you were saying earlier that you’ll concentrate more in the AI area now. Is that correct? And is it, because AI seems to be the most difficult thing to figure out with regards to procurement. ’cause just the whole sector is a mess in all sorts of ways.
Phil: I don’t think, I wouldn’t say, I wouldn’t say I’m not exclusively on AI stuff. I’ve done a lot of AI things. People, well, procurement professionals haven’t bought a lot of ai. So a lot of the implications of AI are. Fairly new. And if you are a consultant like me, have thought about this sort of stuff a little bit in advance of maybe your business as usual procurement people.
You get involved in those sorts of projects. The thing about AI that’s different to all of the other procurements is it has a really broad set of ramifications that do pop up in commercial terms. So last year I was chatting to someone about and it was a bit of a sort of profound legal implication if you buy a piece of AI that replaces a bunch of jobs.
Yeah. What’s the employment law implication of that? How do you navigate the complexity or mitigate the complexity of this AI bot has replaced a thousand people doing this thing. Yeah, it was a hypothetical discussion and no client has ever been in that position at the moment, but they’re the sort of things that people need to think about that’s quite an extreme view.
The other thing is things like ethical, I mentioned ethical debates. My favourite example is self-driving, car driving down the road. It’s got to, you know, a 2-year-old child runs out in front of the self-driving car and it’s got to work out what it does. Run over the 2-year-old or run over the old lady that sat at the bus stop and, you know, how has the AI been trained to decide what it’s gonna do.
Those sorts of ethical debates are things that will have ramifications on the way you buy things. ’cause you need to understand some of the cultural and ethical and moral approaches to the companies you’re buying from. So all that’s really advanced stuff. And so when we’re now we’re starting to embrace AI a little bit more readily and get a bit more serious about it rather than just being a bit of co-pilot on the side.
Those things are things we need to put into contracts and those things are things that procurement people need to get their head round and so yeah, that’s probably the cutting edge of where it’s all heading from an, from a procurement perspective,
Julia: That’s the next step.
Phil: that’s the next step. And I haven’t quite worked out what quantum means yet in my head.
I think Quantum’s just a big computer, but actually, you know, some of the implications quantum could have around cracking cyber or breaking down encryption or those sorts of things. That’s the step after the next step. It.
Nick: That’s just a quantum. Yes. The whole sort of looking at AI and just to get, again, you use words like could, rather than words like Will when you were describing quantum, so cutting edge and it seems to be so up in the air and especially from a procurement person’s point of view, differentiating between truth and marketing. See like even more difficult than usual for something like that when you’re discussing a relatively hypothetical service because it’s all developing so quickly.
Phil: But from a, so let’s say, you know, as a cyber person, Nick, you’ll understand this. If you’re buying a security operations centre that’s gonna look after your business for the next five years and Y two Q is likely to be, you know, in the next two to five years, how do you make sure that your SOC is using cyber safe equipment to support?
So you’ve, we, I’ve gotta think about that Quantum stuff and all those sorts of things. You’ve gotta be aware of the implications of it. So although it’s occurred and a hypothetical, you’ve gotta mitigate for the risk. It’s cool.
Nick: It is, and I’ve just learned what Y two Q is, which especially from like seconds of research while you were talking, I noticed immediately is described as it’s to explain to listeners who don’t have ex aren’t gonna look this up right now. It’s Y 2K except for quantum, except it’s not like Y 2K because there’s estimations of when it will be, when quantum means that existing encryption can be broken rather than you’ve got a date to work through, work to. So that’s.
Julia: That’s a, an explanation worth giving us, Nick. Actually, I had got to, it’s something similar to I 2K in
Phil: Yeah.
Nick: The no that’s how thank you for this discussion and showing us how interesting this field is and also how difficult, just things like, there’s this massive technological change come in soon, but soon-ish. Not immediately, but you need to be ready. But you dunno by when. So it’s a deadline under discussion whilst, which, you know, according to literally my only internet search what, five years away? More or less. But you are negotiating. You could be negotiating contracts that are 10 years long where this may happen, may not happen. Just the difficulty of doing that and like you said, how important procurement people are who see that coming and problems in advance.
I’m struck by my history in cybersecurity, my advocation for war gaming through situations as in, nothing’s gone wrong yet, but let’s do something before it goes wrong. To stop it going wrong is such a difficult sell. Is it the same in procurement as in you make good decisions that stop bad things happening so nothing bad happens. So people don’t see the value in what you do because everything’s just normal. If you do a really good job.
Phil: Yeah,
Julia: the catch 22? Yeah.
Nick: Yeah, and I mean, we might have to delete this from the procurement career selling podcast actually saying, no, people won’t, bel people won’t appreciate you for your entire career. Or am I getting it wrong?
Phil: No you’re spot on. I think the interesting factor is you cannot predict everything that’s gonna go wrong so that the balance is fix as many things as you can in advance and be really good at dealing with them when they do go wrong. Like you say, nice man driving his boat to the side of the sewers canal, that’s a problem that procurement people need to get used to.
You can’t really govern for that. You can put it in a contract to say, if there’s a supply chain problem and you can’t deliver it, to me there’s a penalty, interesting. But actually getting a few hundred quid from a supplier is not as useful as getting the actual product you need to run your business.
So a good procurement person has got a contract that says, give us a few hundred quid because you can’t get your product, but also knows three other suppliers that actually can deliver the product quickly when you need it. And so that’s where procurement’s value comes in, play in both games.
Nick: . Thank you for such an interesting conversation that didn’t go where I expected it to and revealed a lot more about your industry, which which is useful to know. Thank you so much for that. So having sold us on the procurement career, what else are you doing in the week ahead, Phil?
Phil: I’ve just got a new job, so actually most of next week is trying to work out how all that works, which is quite interesting. So I’m moving to a company called Baringa. We’re a management consultant and they are working on, we’re working together on trying to drive a broad IT commercial management proposition.
So my main focus for the next week or so is trying to meet loads of new people and understand where I fit into the world. Outside of that, not much interesting, boring family stuff.
Nick: That sounds really interested also Julia, how about you? What are you doing for the next week?
Julia: For the whole month of May, my company does a walkathon to raise money for charity. So several thousand people are trying to walk as far as possible, and some people are absolutely heroic, can walk hundreds of thousands of steps every week. I’m trying to hit my 10,000 steps a day and I’m so far being reasonably successful on that. So I’m doing lots of walking. And then my very good friend who lives in Malaysia over in London for the weekend, so I’m gonna spend some time with her, which I’m looking forward to. And how about you, Nick? What are you up to?
Nick: So I’m starting I’m starting something called Pro that’s part of something called Project Odysseus, which is not related to film and not arguably not related to the Greek myth actually. It’s just the projects get names after letter, the alphabet, so you know, which order they came in. And just about marketing myself as a freelancer, because I struggle with that as I don’t obviously fit into a box.
And a lot of the people I know struggle with it as well. And the sort of standard marketing thing of find someone with a problem, solve the problem, sell it over and over again. So that’s one thing I’m doing is start, is very much working in public, trying to get my head around that figure out what I’m doing wrong and also can I advise other people on it.
Also, I’m managing a online meeting that’s came after a recent workshop about using LLMs in serious games, which was really informative about where they work and where they really don’t, where they’re terrible. So that brought out a lot of experience. We learned a lot of people we know had used them much more than we expected.
So an online kind of games development group I belong to are discussing that more. So I’m seeing what comes out of that and what ideas people get excited about in the seminar. So that’s something I’m particularly looking forward to over the next week.
Phil: Thank you for listening to WB 40. You can find us on the internet@wbfortypodcast.com and on all good podcasting platforms.