That Feeling When the CPO Says You’re Part of the Talent Problem

CPOs say companies are suffering from a talent shortage and there needs to be more procurement training – do they mean you?

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Will those Boston Dynamics robots – the ones that clamber up and down the stairs and dance to hip-hop – turn their digital eyes to procurement? Everywhere we look, it seems like procurement tech is taking over: from robotic process automation, to chatbot negotiations, to smart contracts.

While you’re wondering if there will be room for human beings in procurement, chief procurement officers are not shy in declaring they don’t have the right people in place and are having difficulty finding them.

In several recent surveys, procurement leaders identify that one of the top obstacles to transforming their organisations is having staff with the right talents and skill sets. CPOs, in the 2019 Global CPO Survey from Deloitte, reported they were losing the talent war. Only 46 per cent of CPOs indicated their teams could deliver on the procurement strategy, down from 49 per cent in the 2018 study.

Is your boss talking about you? They could be. No matter how long you’ve been in the game, it’s essential to understand how to prepare to take on a coveted role in a data-driven, strategic procurement organisation. And to take the target off your back.

With the need to deliver on an organisational value proposition that includes digital-related capabilities, more complex skill sets and competencies are essential to CPOs. But there is a growing gap in the market for employees who showcase these advanced skills: being an Excel ninja won’t be enough in the brave new world of digital procurement.

So, what are CPOs looking for?

In a recent publication from CAPS Research, one third of surveyed procurement leaders said that their top challenge was finding and retaining the right talent. The companies in this survey were implementing a category management strategy, and CPOs were looking for managers with a unique combination of analytical, interpersonal and strategic skills. These companies are also investing in new integrated systems, such as Procure-to-Pay (P2P), to improve spend visibility across the entire organisation.

Procurement digitisation means that companies are moving to a data-driven, analytical process that requires new skill sets. The days of running procurement through massive spreadsheets are swiftly fading. CPOs need managers with skills beyond the stereotypical sourcing, negotiation, and commercial know-how traditionally found in supply managers.

When asked about category management skills, analytical skills were mentioned the most frequently, followed by persuasive communication, strategic thinking, relationship building, and entrepreneurialism. People who know data analytics are a priority, but CPOs also desire procurement managers who are business people first. Finding people with these skills is particularly challenging if a firm is entering a growth stage.

Do you see yourself in any of these statistics? Your bosses are trying to lead a transformation in the procurement discipline. Do you want to be a part of the future or cling to the past?

Skills for the future of procurement

The CAPS Research report outlines the top skills sets CPOs need to build the procurement function of the future.

• Analytical: analyse detailed spend and market data and develop subject matter expertise
• Persuasive communication: communicate with internal stakeholders and executives effectively to influence business decisions
• Strategic thinking: develop strategies to meet business goals and create a competitive advantage
• Relationship building: build and maintain collaborative relationships with internal stakeholders, executives and suppliers
• Entrepreneurialism and creativity: think like a business owner or consultant and use creativity to develop new strategies.

Source: Brief — CAPS Research, Exploring Category Management: Across Different Business and Organizational Settings, April 2020  

The missing ingredient: investment in training

CPOs told Deloitte that strategic sourcing and category management are the top technical areas where procurement staff require training. Business partnering and relationship management are the top so-called ‘soft skills’ targeted for improvement.

Although these target areas have been identified, organisations report they are spending less on training and talent development strategies. In the Deloitte report, 72 per cent of procurement leaders said they spend less than two per cent of their budget on training. That’s actually up from 66 per cent in 2017.

Almost 75 per cent of the procurement leaders said their teams possess little or no capability to get the most digital technologies. Still, only sixteen per cent of procurement leaders are investing in developing their teams’ digital skills.

While there is a recognised gap and a clear correlation between more robust leadership capabilities, spending to enhance team and individual performance training doesn’t seem to be happening.

Embracing data analysis and automation

While it’s hard to hear that you don’t measure up, there is evidence to suggest that the CPOs are right in their evaluations.

A few years ago, one of the leading procurement trends was data capture – if you can’t measure it, you can’t manage it. Well, it worked: now that we have all this data, what do we do with it?

With data pouring in from thousands of transactions, organisations need data analysts and data scientists. These experts support digital procurement transformation through predictive analytics and spend management, thereby helping organisations extract value from their investment in technology. However, many organisations are also building their own data analytics capabilities, so there’s a push to lock down qualified candidates for these new roles in procurement.

Changing the nature of work for procurement teams is one of the intended digital transformation outcomes. Robotic process automation doesn’t mean one of those creepily cute Boston Dynamics robots will be sitting at your desk; rather, it’s software working behind the scenes, tackling tasks of a highly repetitive nature. Meanwhile, your creative human brain can be unleashed on solving problems and working on trends that don’t fit neatly inside the box.

So if your day is spent pouring over thousands of lines in a purchase order, manually changing dates, quantities, part numbers, prices or other terms, there is a solution: the machines can (and will) take over. They will do it faster and more accurately than you can on your best day.

After turning over the spreadsheet work to the robots, procurement team members are free to embrace a more strategic perspective that delivers value to the company. You may be overseeing the work of the automated tools, managing by exception.

Depending on your position, you may be expected to spend more time with the business partners you support, learning about their business priorities and obstacles. The goal here is to align procurement objectives with strategic business outcomes.

Freed from managing spreadsheets, procurement managers can reorient themselves toward delivering the highest value of service rather than the lowest cost. Spend analytics can drive strategic sourcing decisions, identify areas ripe for automation and highlight critical categories that require more in-depth interactions. 

You may be asked to develop supply chain resiliency, locating new sources to avoid disruptions like pandemic shutdowns or trade and tariff issues. Vendor innovation means building meaningful, long-term relationships with suppliers, enabling an organisation to become a customer of choice.

Get ready for the age of digital procurement 

Procurement is transitioning from the ‘three bids and buy’ model to strategic sourcing and supplier-enabled innovation. Strategic sourcing uses longer-term contracts so that the working relationship can develop over time. Suppliers are more likely to innovate, knowing they will have a revenue stream from their investments. The new wave of procurement professionals will develop and manage these relationships in partnership with their internal clients.

It’s clear procurement leaders desire to transform their organisations, but most aren’t investing in their current staff to develop the skills they desire. That means you’re in charge of your career. Don’t wait for the company to offer training.

Top tips for taking charge:

• Find out more about data science and analytics: there are many online resources available, including online boot camps and other focused learning experiences.
• Look for opportunities to practice your project management and leadership skills: think of yourself as a consultant with one client – how does a consultant think and act differently compared to an employee mindset? Learn how to tell a story about the business case that goes beyond numbers to accomplish your goals.
• Seek out opportunities to be exposed to different aspects of your company and industry: Understand the supplier base and market, the current structure and relationships, and opportunities to innovate.

High-performing organisations are adopting digital tools and technologies to enhance performance. The digitisation of procurement is a fact of life; it’s up to you to be a part of the solution, or one of the people your CPO would like to replace. 

Want to know more about the digitisation of procurement? Read this!