When Oxford Economics recently launched a program on the future of procurement, our surveys showed us that procurement is becoming more strategic, more collaborative, and more technology-dependent than ever before. The function is changing, fast.
But none of those trends can deliver on their full potential unless powered by the right people, from top leadership to entry-level employees. Human talent is the connecting thread that ties together the disparate strands of procurement’s transformation.
So what does your company need to do to get the human factor right?
Communicate a vision of the future
Procurement executives are more confident than non-executive practitioners that the function will be a big-time strategic player in the future. In fact, rank-and-file workers are substantially more likely than their bosses to expect the function to shrink or disappear. Keeping the troops optimistic and inspired will be essential to employee engagement and retention and to the success of strategic endeavors. Leadership must evangelize procurement’s role as a strategic partner across the business, communicate clearly to employees their role in shaping that promising future, and work across the organization to ensure the right mix of skills is being developed.
More strategic work means more collaboration – between procurement organizations and other functions within their own companies, and with external partners and suppliers. This kind of work requires a range of soft skills, negotiation experience, and business acumen – all of which can be tough for procurement departments to find, especially in combination with technical expertise. We talked to the chief procurement officer (CPO) of a large US financial institution who underscored the importance of hiring and training employees with these varied skill sets. “We should be developing talent that is capable of working with our business partners to bring the most value to our company,” the CPO said. Procurement shops that get it right will see major benefits from collaboration, including cost savings from new initiatives, better management of supply risk and compliance, competitive advantage, and additional revenue.
Build a culture around operations
The day-to-day operations of procurement must change to handle new partnerships with suppliers, increases in services purchasing, management of accounts payable, and the growing use of contingent workers, among other jobs. Employees are under pressure to adapt to new processes and tools and work on more strategic projects – all while finding the time to continue executing on their traditional tasks. Leadership must support practitioners by recognizing the impact of this operational transformation and building a culture that supports change and development.
Upgrade technology (and the training that goes with it)
New tools are everywhere: B2B commerce networks, knowledge exchange platforms, analytics, and automated processes are changing how procurement pros do their jobs. These new tools are essential to procurement’s progress, but won’t provide much value if the practitioners who use them most lack the proper training to stay up-to-date on their tech skills. And ongoing development isn’t just for mid-level employees – leadership should also take steps to build a culture of continuous learning that extends all the way to the top of the food chain.
There are some big, shiny objectives on procurement’s horizon. But to reach them, your company’s procurement organization must focus on work at human scale. To become more strategic, more collaborative, more technology-driven, and more valuable to the rest of the organization, pay careful attention to talent issues. Communicating clearly with employees about their future in the function, offering the support needed to keep up with changes in their day-to-day work, and offering development programs that focus on both technical and soft skills are a good start.
Ultimately, companies that manage to keep the best employees around are more likely to realize their visions for a strategic procurement function.
Learn more about how talent, skills, and leadership are driving the future of procurement. Download Oxford Economics’ think piece and infographic on “The Human Challenge.”