With risk and uncertainty around every corner, new technologies that promise to automate routine tasks and provide unprecedented levels of insight, and stakeholders expecting support on everything from reducing carbon emissions to sourcing innovative products, the capabilities required of procurement today differ drastically from those of the administrative, savings-focused functions of yesteryear.
That poses a challenge for leaders – how to structure the function and focus training and recruitment resources to ensure procurement is ready to meet the demands of the future.
To help the community get to grips with this challenge Procurement Leaders carried out extensive research to produce the Functional capabilities: Elevating procurement in an age of disruption report, which showcases the people, technology and process changes that functions are currently undergoing.
The report highlights how procurement job roles are becoming more specialised and the skills that are becoming increasingly important as the function gets to grips with its new responsibilities.
Rise of the specialists
The ever-wider scope of expectations placed on procurement means that many category managers have been asked to take on a much wider range of tasks on top of their conventional responsibilities. These new responsibilities including identifying supplier risks and innovation opportunities, monitoring and managing performance, and taking a proactive approach to managing internal stakeholders.
But with these activities playing an increasingly important part in the function’s strategy, leaders are increasingly investing in full-time specialists who can focus on these priorities.
That’s not to suggest that the days of category-focused roles are numbered, but the research found that the function’s future headcount growth will be largely be a result of teams creating more specialised roles.
As Figure 1 (below) shows, these new roles will come in a wide variety of different areas, from business partnering to risk management, sustainability, data analytics, innovation, and supplier diversity and inclusion
While these new roles will provide an opportunity for the function to develop real expertise in these future-critical areas, the challenge will be in ensuring coordination between teams. Even the best risk manager or sustainability specialist will struggle to make an impact if they are operating in a silo.
Successful functions will need to implement ways of working that allow these specialists to draw on the relationships and category expertise of their colleagues to maximise the effectiveness of their role.
Skills of the future
As well as the need for these specialist areas of focus, the general requirements of a procurement executive are changing as well. The Functional capabilities report found that leaders are reshaping their teams with a focus on:
While this yielded some benefits, the process was far from optimal for the following reasons:
- Greater integration with the business
- Stronger business acumen
- Greater flexibility
To achieve this, recruitment and training are increasingly focused on soft skills such as collaboration, communication, adaptability and leadership, whereas technical procurement knowledge is seen as significantly less of a priority (see Figure 2, below).
As well as ensuring the function has a wider variety of skills to draw upon and is better set to deal with cross-functional and strategic activities, this also means that procurement can draw from a much wider talent pool – both internally from other functions and across the workforce.
Procurement has a variety of headwinds to battle at the moment but also has a huge opportunity to position itself as a strategic partner. Investing in the right roles and skills will be vital if CPOs are to seize this moment.
Report: Functional capabilities: Elevating procurement in an age of disruption