When is the right time to hire a procurement director, a person dedicated to overseeing purchasing functions and the policies that underpin them?
It’s a question that stirs debate within charter school organizations around the country.
The answer, of course, is, “It depends” — on factors related to budget, organizational structure, an organization’s growth trajectory, compliance requirements, politics and more. Still, there are powerful signs that suggest the time may be ripe for an organization to invest in a dedicated procurement person. Here are five such indicators, provided by charter school officials whose own organizations recently have grappled with this very issue.
- When purchasing and associated compliance responsibilities have become a major (and perhaps unwelcome) burden on operations and/or finance staff.
Though it has considered hiring one, KIPP San Antonio Public Schools currently lacks a dedicated procurement director, so many purchasing responsibilities at the six-school, 400-employee organization are handled by Chief Financial Officer Shawn McCormack and other school staff.
McCormack acknowledges “it’s been a struggle to balance the amount of work” that comes with fulfilling the organization’s $11 million procurement budget. Adhering to the new procurement policies that McCormack has helped implement in the past couple years, along with the compliance requirements that accompany the organization’s use of state and federal funds, has “put a big burden on our staff.”
“I wish last year we hired a procurement manager, because we keep saying we want to do [procurement] well, yet we don’t have a person that owns it,” he says.
When procurement responsibilities fall on people who lack experience or interest in that area, or are stretched too thin in their jobs, oversight and accountability may suffer. That can invite compliance snafus, rogue and maverick spending, and inadequate due diligence on purchase decisions.
- When an organization wants to get serious about procurement as a strategic cost-control/cost-reduction initiative.
For organizations looking to strengthen their bottom line and free up additional funds to put toward the core educational mission, hiring a procurement director can deliver an immediate and substantial ROI, says Stephen Parmer, who took over as head of procurement for Uplift Education, the largest charter school network in North Texas, in early 2016. In that position, he oversees a non-payroll budget exceeding $50 million.
Efforts by Parmer’s team to centralize and streamline what had been a relatively loose and largely departmentalized purchasing operation at the 37-school network in the Dallas-Fort Worth area are already yielding solid dividends, he says. “The first year [with a procurement director], maybe you don’t see a positive number. But I promise, within the first few years, that person will more than return their salary to the organization, so the organization can pay teachers more, put more back into the classroom and put more back into its buildings.”
The decision to hire a dedicated procurement person is more about strategic priorities than the size of the school network or its procurement budget, adds McCormack. “It’s not when you get to $10 million in purchasing, or when you get to six schools, or whatever. It’s more when you truly want to make procurement an organization-wide initiative.”
- When it’s clear an organization is growing fast.
Growing charter school networks should consider hiring a procurement director sooner rather than later, because growth means an organization likely will be making more frequent — and higher-dollar — purchases.
“It can make sense even when you have two schools,” Parmer asserts. “You bring someone on as you start to grow out of a handful of schools, so that person can really start to dig in and evaluate. I know for myself, within the first few months, there were a handful of contracts that we identified that I know for a fact, for the next few years, we will save my salary multiple times over every year because of just reevaluating certain contracts.”
- When an organization has a purchasing policy or plan in place, but wants better buy-in and more impact from that policy.
As solid as the bottom-line returns on KIPP San Antonio’s new purchasing policies have been, the impact likely would be greater had the organization brought in a dedicated procurement person to oversee implementation of those policies, says McCormack. “I wish we hired one a year-and-a-half or even two years ago, as soon as we became more sophisticated with our compliance work and built our procurement policy. We didn’t have anyone in place to really put in the work required for it to be successful. When we decided to take on procurement as an initiative, we should have put the resources behind it by hiring a person.”
- When there’s clear slippage — in the timeliness of getting supplies and services to students, faculty and staff, in the timeliness of building maintenance and repairs, and in compliance efforts around procurement.
Operational and compliance issues like these can become problematic for organizations in which focus on procurement is lacking. When supplies are slow to reach the classroom or the office, that can cause impatience that may prompt teachers and staff to go off-policy with rogue purchases.
Failure to meet regulatory requirements can also be troublesome, says McCormack. “Compliance is the easiest way to be shut down.”
