Changing procurement skill sets key trend till 2020
In imagining the future of Procurement, one needs to think broad, deep, global industry expertise. Finely tuned business acumen. Sales, marketing, communications, performance management, and networking.
This is the consensus reached in a report ‘VISION 2020: Ideas for Procurement in 2020 by Industry-Leading Procurement Executives’, the outcome of a dialogue between Ariba and leading procurement practitioners.
Supply pros expand expertise
A significant characteristic of the new supply professional in 2020 is the extent and depth of his or her knowledge. They will know everything, from the science, to the economics, to the laws and politics of their supply markets on a global scale.
John Campi, former CPO with DuPont, Chrysler, and The Home Depot, says supply management professionals in 2020 “will be capable of analyzing and understanding the worldwide dynamics of markets on a variety of fronts. For example, it may be prudent in some countries to pay people to witness your containers being loaded onto ships while in other countries you do not need to make that investment. Supply management professionals of the future will have that kind of deep, detailed insight into the markets that matter most to their enterprises.”
As Debbie Manos-McHenry, Chief Sourcing Officer for Huntington National Bank, sees it, “No company can afford to be surprised by one supplier leapfrogging past another. Supply management professionals will be like investment analysts, possessing both deep and broad knowledge in and around their supply markets and industries.”
“Supply management’s job in 2020 will be to maintain a constant understanding of the marketplace,” agrees Roy Anderson, Vice President, Procurement Services for Metasys Technologies. “Supply management professionals are going to spend much more time understanding markets from longer-term perspectives rather than always looking through the lenses of sourcing events or transactions.”
What is more, Anderson believes that understanding will extend down into the lowest tiers of the supply chain. Our job will be to understand how we can build a product or service as effectively as possible by taking knowledge that is inside the supply chain and bringing it forward to the designers within our own companies.
“With technology innovating at such a rapid rate, supply management will be expert enough to understand if a supplier is staying current, innovative, and creative in its marketplace or if there are new players coming along to unseat them.” But Anderson does not necessarily believe that deep expertise always needs to exist in house or with direct employees. “Very often, it is going to make more sense to source industry or market expertise from outside.” Sometimes that expertise will come from professionals, but increasingly it will also come from communities that share and aggregate information among themselves.
“I believe we are going to see more, better sources of third-party market intelligence and we are going to have more resources to invest in routinely acquiring that intelligence by 2020,” Anderson adds.
Talent competition heats up
There is a strong feeling that the talent pipeline is too sparsely populated to meet the demand for strategic supplier-facing professionals that will develop by 2020. The outcome will be intense competition to attract the best and brightest on their terms.
“We have always been extremely successful in procurement when we have the right talent in place,” observes Jean-Jacques Beaussart, Chief Procurement Officer, KeyBank.
“By 2020, it will be the CPO’s job to be a magnet for talent. We will accomplish this by promoting global talent, employing state-of-the-art technologies, training people consistently and broadly, and ensuring they can leave our organizations for bigger corporate roles.
“When you focus on talent, you become known as an organization that can be trusted. It is a brand you can use to attract more business, more projects, and more talented people to work with you. There is no doubt in my mind this will be a number one priority in 2020.”
“What motivates the emerging workforce will be very different from what has motivated people in the past,” suggests Sodexo Chief Procurement Officer Ann Oka. “What makes people feel successful will no longer be steady progress along a linear path. Companies will need to find innovative ways to allow the newer generations the latitude to pursue all of their interests.
“Already, we (Sodexo) are offering flexible work arrangements, telecommuting, job sharing and other employee value initiatives to keep this new generation engaged. We believe that creating a flexible culture will help us build employee engagement and capacity for business problem solving. But that raises new challenges around such topics as how to ensure people remain visible in a large corporation, how to ensure they are developed to be promotable.”
From a compensation point of view, Beaussart believes: “We will need more non-traditional compensation models, bigger bonuses with variable versus fixed compensation increasing. “I would see a bonus structure, where the bonus has two parts. The first is linked to performance of the team and the other to individual performance. The team bonus comes from a scorecard developed at the beginning of the year saying, ‘This is what we are going to achieve for the corporation.’ It can be linked to savings, how you manage business relationships, adoption of automation technology, whatever it takes to manage success for your area.”
Supply pros get savvy
Professional. Polished. Intelligent. Respected. Influential. Persuasive. Visionary. Strategic. Sharp. Global. Collaborative. Executive. Savvy in business. All are terms used by project participants to describe the new supply professionals of 2020.
This set of characteristics feeds four essential sets of activities for spend management professionals in 2020:
• Strategise for the business with end customers in mind.
• Track and capture innovation already happening in and around the critical supply base; proactively drive innovation where it may be needed in the supply base.
• Relate with and integrate critical suppliers and service providers wherever appropriate and as thoroughly as possible in the business lines.
• Sell positive change within the enterprise and sell the highest-performing, most innovative suppliers on why they should invest in driving one company’s success to the exclusion of its competitors.
Says KeyBank Chief Procurement Officer Jean-Jacques Beaussart: “If I had to choose key elements of success for 2020 supply management organizations, I would choose innovation, integration, strategic planning, thought leadership, and a real understanding of how to manage third parties.”
“Part of supply management in 2020,” adds Roy Anderson, “is going to be about demonstrating unequivocally that changing — to the new solution, to the new supplier, to the new approach — is not only valuable, but easy and fast and reduces risk to the greatest extent that is possible.
“The CPO is going to have to be a real salesperson — one capable of selling both internally and externally. It is going to be a very strategic position, where people have clear understandings of what the supply base can do in terms of supporting the company.”
Maersk’s Vice President of Procurement Henrik Larsen suggests that, by 2020, “Deep category expertise will not be enough. To succeed and work in procurement and supply management, you will need to be a consultant, a networker, a relationship builder.”
The information in this article was sourced from the report ‘VISION 2020 Ideas for Procurement in 2020 by Industry-Leading Procurement Executives’.