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Three Hurdles Category Management Teams Must Overcome for Sustainable Results

Alex CarlsonJuly 23, 2024Read time: 8 min

Businesswoman jumping over hurdles

Given my experience on both the client and service provider side of the fence, I know a thing or two about category management—the good, the bad, and the ugly. Having developed a blended perspective from these roles, I’ve become painfully aware of the key issues that plague this field and prevent consistent results.

But with every hurdle there are course corrections. Before we get into the latter, let’s take a look at the former:

Hurdle #1: Strategic efforts cannot advance from a reactive position.

As a category management leader, I know the drill—you show up each day with the intent of driving strategic efforts that produce measurable results, but find yourself in an endless loop of “firefighting.”

You are forced to manage from the top of your inbox—battling things like a deep-dive discovery of a one-off operational miscue in order to brief executive sponsors, chasing payment gaps for suppliers, and/or providing reasonable explanations of UFOs (“unidentified funding outflow,” of course) to stakeholders. In your spare time, you’re assembling and reviewing performance reports, updating third-party risk compliance data, preparing for the next RFP, or hosting quarterly business reviews where, ironically, much if not all of the discussion seems to revolve around fires from the previous cycle—only to learn that another incident has occurred in the meantime, thereby restarting the cycle.

This endless loop forces category leaders into a constant reactive mode while preventing them from advancing strategic initiatives that truly validate their team’s value and move the organization forward.

Hurdle #2: Managed spend does not equal manageable spend.

The Institute for Supply Management (ISM) refers to “managed spend per category” as the leading metric for category managers, highlighting the average annual spend managed for several industries, including:

    • Financial Services: $141 million
    • Oil and Gas: $186 million
    • Utilities: >$200 million[1]

Considering the size of these categories and so many technological resources (procurement systems, APIs/integrations, and AI), there must be a clearly defined path for monitoring contractual expenses and ensuring their alignment with their respective contracts—right? 

In our experience, while contract systems abound, they largely remain disconnected with work engagement systems (i.e., work order/CMMS systems or purchase order platforms), supplier invoicing systems, and payment systems. In fact, this separation of work request, invoice routing, and supplier payment may even be required to ensure proper approval controls amid heightened risk management concerns.

Although I previously oversaw the contracting process and supplier rates for several categories, I was not part of the invoice workflow. This made sense from an operational viewpoint as one person cannot reasonably attest to work being done across thousands of locations for even one national supplier (let alone multiple), but this then places those unfamiliar with the contract in the role of validating contract costs. In this “Good Contract, Bad Deal” model, category leaders simply cannot ensure all supplier costs comply with their supporting contract.

Without a process to validate every cost—including those that are “black” and “gray” and not just “white”—against the parent contract, managed spend is merely a metric, not an actual practice.

Hurdle #3: Category generalists do not garner stakeholders’ attention.

Of all the hurdles, I see this as the most common and difficult to overcome internally. As category management exists somewhere between supply chain, strategic sourcing, risk management, finance, and operations, it is easy to be sucked into generalist territory vs. occupying the strategic value swim-lane. Once the “generalist” label is placed on a team it is difficult to remove and quickly leads to underutilization (see: Hurdle #1) versus earning an influential seat at the table with the delivery of strategically aligned victories.

Ironically, one of the main things that drives teams to become generalists is saying “yes” to leaders. When a task or project is added, something of equal time or effort must be removed—or lessened in priority—for the added item not to result in a net-negative to core duties. While some projects absolutely belong within category management, the question needs to shift from: “what team can absorb this effort?” to “how can this team add value to this effort?” Of course, this is a balancing act, as you need to maintain stakeholders’ support and resist requests that could shift your team from its organizational purpose.

You may need to reiterate that category leaders do not lack the required skill to add value, but instead lack capacity, and that things like contractual compliance conditions, invoice audits, market analysis, spend reduction campaigns, scope validation, and measuring stakeholder feedback would suffer as a result.

However, there’s a larger consideration for category management teams—if your team is routinely asked to absorb tasks that do not contribute to your goals or purpose, it is very likely that you have lost the attention of your stakeholders for your designated role and have become a utility player. Immensely helpful…but not necessarily required.

If your category management team is in this position and core roles need to come back into focus, you are not alone—but in my experience, this can be a precarious position for internal teams without a realignment focused on organizational priorities.

Solution: Establish your strategy and intentionally align your tactics.

We’ve established several hurdles for category managers—now let’s discuss the path forward.

Some leaders start with their goals or milestones and work backward to ensure daily activities align. I see this approach working with new teams or functions, but not as helpful for existing teams. For an existing team feeling overworked and under-resourced, I recommend the reverse approach.

Conduct an honest review of how the team is spending time every day (list tasks, group by type and time spent) and assess if the sum of those activities will translate to the desired outcome or organizational goals. I led this process in my former team and the results were both alarming and informative.

Most teams will tell you that strategy and tactics were originally planned to complement one another but fell out of sync due to an unplanned event, such as turnover, company re-org, system changes, etc. Although understandable, the opposite should be true: near-term and long-term alignment is needed most when teams are stretched thin. A quote attributed to the military legend, Sun Tzu, comes to mind:

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”

If the hurdles examined here ring true for your team, working to establish your strategy may need to be your first step. The next step should not be an automatic staffing justification with an unknown success rate, but instead deploying a proven, strategic partner that will:

  • Listen and help you initially form a strategic plan
  • Execute to reduce reactive firefighting and manage supplier spend
  • Free your teams to deliver the value that will elevate your team.

Fine Tune exists to deliver lasting value to our clients. We serve as an extension of your team,  incentivized to help you deliver sustainable results and help you adequately manage the risk of your supplier engagements despite time and resource constraints.

[1] https://www.ismworld.org/supply-management-news-and-reports/news-publications/inside-supply-management-magazine/blog/2019-11/the-monthly-metric-managed-spend-per-category-management-employee/

Alex Carlson Headshot

Alex Carlson

Vice President of Facilities Management Services

Alex joined Fine Tune in 2024, bringing more than 14 years of executive-level facilities management and operations experience. Alex spent the last five years at Wells Fargo within the global property management division, most recently as Vice President of Category Management where he served as the national contact for multiple facility management services overseeing strategic operations, RFPs, and compliance efforts. Prior to Wells Fargo, Alex worked in various leadership roles at CBRE, the world’s largest provider of integrated facility management services. Today, Alex oversees all aspects of Fine Tune’s facilities management offering.

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