Successful Governance in Procurement

Image of Governance

SIG University Certified Supplier Management Professional (CSMP) program graduate Cathy Rutherford describes how curcial Governance is in a procurement organization and how it can transform your team for the better. 

Governance is essential as it determines the value that Procurement can provide to the business, whether saving money, avoiding risks, or achieving broader business objectives such as innovation or time-to-market improvements. Critical to any department’s success is balancing real-world challenges with your Governance program.
In addition, defining your Governance model will lay out how Procurement interacts with the company as a whole. Defining how risk and compliance will be measured and monitored is another critical aspect.
You must use the appropriate key performance indicators for an organization to monitor Procurement’s operations and to ensure it is delivering according to corporate objectives, which may change as the business environment fluctuates. Procurement departments need to take into consideration specific corporate culture for compliance. As trusted advisors, Procurement professionals need to stay agile and flexible, especially at the start to help nurture stakeholders during the change management process.
This will encourage the required buy-in to the program and procedures. In my current company, we are growing fast, so stakeholders are changing and stakeholders are coming on board, and we are expanding our global footprint. This is another reason why just having a Governance program is not sufficient; you must keep training your stakeholders on the Governance program.
I have seen that a centralized procurement department can leverage scale and drive compliance, while decentralized structures can be close to business needs and help nurture innovation. A hybrid, ’center-led’ approach is possible, but organizations must ensure that the correct type of reliable spending and performance data is available to support the central Procurement Team.
Procurement Governance tends to be centralized during hard times and more decentralized during growth periods. Procurement leadership would be wise to build flexible structures to adapt quickly to changing needs.
In the section titled, “Looking at the management of transformation through Governance support and resources,” I found that the information was spot on, especially with cross-functional teams to make up the committees; however, I do want to note that every organization might have a different approach because of their structure. Moreover, the new ERP cloud technologies are driving Procurement organizations’ responsibilities. For example, module 8 states that the Legal Team handles the contract management of the executed contracts in the contract module. The AP team would make sure that the suppliers are set up correctly and that all Government regulations are followed.
While this might have been the norm in earlier years or with an organization using an on-premise ERP system, I have found that cloud-based ERP systems have changed the structure so that the Procurement Team is responsible for all the supplier and contract data. The Procurement Team must collaborate with the Legal Team and the Accounts Payable Team more than ever to make sure everything is set up correctly both in the supplier setup module and in the contract module to ensure that government requirements are correct on the supplier setup. This is crucial to ensure success in a fast-paced environment with changing players.
Referring to Module 10, Lesson 2, “Exit Management Components,” I believe that most Procurement departments put an Exit Plan/Transition Plan in place before they have decided to terminate a contract. After going through the course for CMSP, I have determined that my team needs to set Exit Plans and document the plans before putting a contract in place. The course pointed out that setting up an Exit Plan is essential for Tier 1 suppliers and suppliers that are Customers. This section made me think about our process and conclude that this is a critical point to consider.
Having corporate norms and Governance programs only works when you ensure that all parties understand what is needed and buy into the processes. The Procurement Team has developed that trusted advisor’s confidence with the stakeholders to ensure compliance and accountability. I will encourage my team to take the CMSP course after completing the CSP course.

The Certified Supplier Management Professional program is a five-week course delivered through SIG University’s unique education platform. Visit our website to learn more about the discipline of governance and enroll for the upcoming semester.


Cathy Rutherford, Director of Procurement, CoStar Group Inc.

Versatile, detail-orientated professional with proven management and consulting experience in the Technology/Data analytic, Financial (banking and brokerage), Construction, Facilities, IT, MRO, R&D, Marketing, Discount Retail and Business-to-Business Exchange environments; 28 years in purchasing and contract negotiations and 15 years in international E-sourcing. Skilled in developing and implementing internal processes that consistently improve business organization and productivity. Cathy career has demonstrated hands-on leader with outstanding analytical and communication skills in providing key information across all levels of the organization.

In her capacity at CoStar she ensures collaboration with the internal business partners and consolidate the global spend within the CoStar family of companies.  In addition, Cathy is responsible for ensuring that our supplier partners are meeting all CoStar business requirement and required KPI’s per the company contracts.

In her previous role, Cathy served as Director, Head of Procurement for QIAGEN, a Global Biotechnology Company based in Hilden Germany.   Prior to this role, Cathy held a number of Procurement leadership positions within the Retail, Consulting, B2B, Finance/Banking, Construction and Biotechnology Industries. Cathy procurement background stems mainly from experience in Contract Management, Strategic Sourcing, Supply Chain and leveraging her ability to bring groups together to collaborate both with internal business partner and supplier partners in a global environment.

Cathy received her BS Psychology degree from Winthrop University and Master in Commercial and Government Contract Management form Villanova University. In addition she received her Six Sigma Green Belt from Six Sigma Development Solutions, Inc. and CSP from SIG University.