The 2010 ISM Annual Conference was in full swing today, with just around 2,000 attendees rushing to one session or another.  The day started off cloudy (again) but brightened up to what you would expect from San Diego weather later in the day.

The first session I attended was "Measuring Strategic Sourcing and Procurement Maturity" presented by Dr. Marika Lindstrom, VP of Indirect Procurement at Unilever (see actual preso here ).  At the last minute I had decided to opt-out of where I was originally headed—a session entitled "CPOs Speak: Earn—and Keep—a Seat at the Table."  I already have a seat at the table and someone would likely die trying to move me away from the table, so I went on to Marika's presentation instead.  What a great choice.  I was in awe—Marika clearly is a procurement machine.  Be sure to download her presentation while it's still available.  With around 400 procurement professionals sourcing indirect procurement spend of about 12 billion Euros annually, Marika has honed the art and science of managing and upgrading procurement talent.  Her presentation focused primarily on the right key performance indicators or metrics for managing procurement.  Some interesting points that she made:

• Striving for 100% customer satisfaction doesn't make sense because there's a natural (and good) tension between buyers and their customers—achieving 100% may mean that you're just doing what the customer wants you to do (versus what your employer wants you to do, e.g., save money and mitigate risk).
• Rogue spending is particularly an issue in indirect procurement and not so much for direct (I guess I knew this but I had never put the thought together in my head).
• Procurement researchers say that, very generally, there is a 10% - 18% savings achieved by a procurement professional if procurement is involved prior to supplier selection and 0% - 5% savings if brought in after supplier selection.  That's a nice little statistic to through around to your internal customers.
• Competitive bids typically result in a 10% - 20% savings due to competitive pressures on vendors whereas the same effect using e-auctions is around 70% (and she's having success using reverse auctions for services—which is an atypical category for auctions).
• Shoot for a procurement function ROI of >10 (where ROI = Total Savings / Total Cost of Procurement Function [including salaries, fringe, training, occupancy, etc.])
• Sustainability will continue to be a focus, so begin thinking about related KPIs for procurement staff (such as diversity supplier spend as a percentage of total spend).

Marika also described the skill levels of her staff as: foundation, practitioner, expert, and thought leader.  These are formal skill levels and there are deliberate efforts she undertakes to move staff up the levels to thought leader.

After that highly enlightening session (I need to reread her presentation, her conference proceeding, and my notes to really absorb it well and do something actionable with the information), I spent a little time in the ISM Career Center.  I have my HR recruiter at the conference with me since I have two key procurement positions open, and we were canvassing all of the fine talent at the conference.  Lots of very qualified prospects...

Following that, I attended "Contract Writing as a Critical Element of Supplier Risk Management."  It was a very good presentation, but I quickly realized that I wasn't going to learn anything new.  One interesting item was that the presenter referred to boilerplate as the "Invisible Provisions."  I found myself nodding in agreement—once you draft those boilerplate provisions, they become invisible to you (and that's not a good thing for all of the obvious reasons).

I popped into a niche category session, "Optimizing Meetings Spend."  That's a significant category for my procurement folks (we book over 60,000 hotel room nights per year).  There wasn't much attendance in this session, but the folks that were there were obviously very deep into the category based on some of the questions and answers.