Procurement summit addresses tension with finance
One of the liveliest sessions at the recent Hotelier Middle East Procurement Summit revolved around the relationship between financial and procurement, with strong views about the way the departments should work together.
Taking place at The Ritz-Carlton DIFC in Dubai on November 4, the event proved to be another strong day of debates, discussions and presentations, across a wide range of topics affecting the profession.
In the panel session moderated by Orsini SPI and Direct Hotel Supplies director Manesh Balani, the question was put forward whether procurement and finance should be integrated, and if procurement needed to report to finance.
“Your knowledge about your area, even your CEO cannot compete with that,” said InterContinental Dubai Marina director of procurement Pushpa Nair.
“When it comes to your area, you are the CEO of your position. You know the products better than anyone else. So why do you have a channel for reporting, when you can report directly, because your area is as important as any other area?”
One of the main gripes raised was the idea that finance often overshadows procurement, both in terms of taking credit for successes, and also when it comes to paying vendors on time.
“With the standard uniform accounting system, which everyone does, it [would be] nice for procurement to have our own slot and to show what exactly they contribute to the bottom line,” suggested Shangri-La Hotels UAE central purchasing manager Mohamed Baloch.
A voice of dissent to this idea came from the audience, in the form of Jumeirah at Etihad Towers Abu Dhabi director of finance Stephanie Timsit. “It’s not a question of ego. In the P&L is there anything that says Stephanie as done a good job? No,” she said.
“Do I really think procurement should have a line saying they’ve made savings in a certain category? No. All of us in back officer are doing a good job. Do I have to prove that reservations is doing a good job? Not really. Because people are coming there. Do I have to prove that sales can do their job? Yes.
“I’m just here to guide them not do their job or take over their thunder. If you are working as a team, finance and purchasing becomes one team.”
Another sore point was the lack of understanding by finance of what procurement is looking for, and especially the fact that cheaper is not always better.
“[Finance] are masters in their area but when it comes to procurement sometimes they just look at the price tag,” said Nair. “For us as procurement guys, [it’s not about] price alone, it’s about the value added, the support you get. Finance refuse to look at that. They insist on [the cheapest].”
Baloch added: “If I’m talking to a vendor, I have the experience to read things finance don’t understand.
“But when I am trying to explain that in the same way to finance, they don’t want to listen to it. Sometimes you just give up.”
The Hotelier Middle East Procurement Summit attracted more than 90 delegates and was sponsored by by Associate Sponsor A. Ronai, Official Water Sponsor Horeca/ Aqua Panna & San Pellegrino and exhibitors Pulsar Foodstuff Trading/Gourmet Olive Market, Lavazza/Eurocoffee, Ruud Lighting, Unique Precise and Sun & Shades.