Procurement Skills & Careers, The Next 10 Years

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Procurement Skills and Careers

Procurement Skills and Careers- The Next 10 Years

Guy Allen November 2014



Agenda

1. Introduction

2. Procurement skills in the Past

3. Current models & thinking

4. The future of procurement (short version!)

5. What this means for skills

6. Career and personal development

7. Wrap up



Introduction

The Real World Sourcing Series 2014 is a series of sessions covering hot topics for procurement professionals.

The Real World Sourcing Series is promoted and supported by Tejari, and developed by Peter Smith (Spend Matters) and Guy Allen (Real World Sourcing Ltd.)

Guy Allen started his procurement career with Ford Motor Company, moving through IBM, SmithKline Beecham and GSK , becoming CPO for Abbey National and VP Global Sourcing at Fujitsu before joining 4C as a Managing Partner. Guy has since left 4C and started his own consultancy, Real World Sourcing Limited.



Part 2 – THE PAST

Where were we 30 years ago?

Look back before we look forward....

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Part 2 – THE PAST

• Procurement spent a lot of time on transactional processing

• The function worked largely in a silo

• Data was hard to come by and even harder to analyse

• Most supply from local or national suppliers



Part 2 – THE PAST

• Skills were heavily process related

• Little thought of strategic sourcing, CatMan, SRM, spend analytics, electronic P2P...

• Analytic skills were still valued – but mental arithmetic was probably the most useful!

• Negotiation was often unsophisticated but skills in that area were appreciated

• Career progression was linear in most organisations



Part 2 – THE PAST

Purchasing Clerk

Assistant Buyer

Buyer

Senior Buyer

Purchasing Manager

Head of Purchasing

Graduate entry?

“Too old for the shop-

floor” entry?

Typical Career progression



Part 2 – CURRENT MODELS AND THINKING

• There has been a huge change in “procurement” over that time, and therefore in the skills needed to succeed

• There is no reason to think that there won’t be just as much change in the future

• But with the pace of technology change, we might see the same amount of change in the next 10 years as the last 30 ...




• We’ve come a long way in the last 30 years in terms of procurement development

• There is a much better understanding of procurement skills and capabilities required to succeed in the profession

• But still some confusion and uncertainly about what really matters

• So now let’s look at some of the current thinking and models around skills and capabilities




The Four Faces of Procurement – from a Spend Matters Paper of 2012

LEADER

INVESTIGATOR

DIPLOMAT

ANALYST

Internal External

Technical & analytical

Personal & Relationship

FOCUS

SKILLS


End to end supply chain

analysis & management

Total cost management

and development

Strategy development and

execution

Contract development Negotiation Supply base management

Supplier relationship

management

Governance, statutory

and regulatory

requirements

Risk management

Functional risk

management

Business process and

operations

Systems knowledge and

experience

Programme and project

management

Management information Accounts payable

Data collection P2P systems and tools E-sourcing

Sourcing process Understanding customer

needs

Stakeholder relationship

management

People development Leadership Change management

Networking/leveraging

internal environment

Innovative and creative

solutions

Tenacity & determination

Strategic awareness Analysis and judgement Communicates with

influence

Yellow = Level 0

Amber = Level 1

Green = Level 2

Blue = Level 3

Red = Level 4


Courtesy Kim Godwin


Skills/ knowledge / Behaviour

Strategy Development and Execution

Knowledge & understanding of relevant market, supplier & category strategies; ability to produce relevant strategies to meet business needs.

None – Level 0

No knowledge, experience or competency required in this area

Basic – Level 1

Ability to manage basic category low value, low risk supplier categories & identify appropriate category strategy.

Advanced – Level 2

Understands supplier categories & strategies for high value, low risk supplier categories & develops & implements appropriate strategy

Experienced –

Level 3

Develops, communicates & implements supplier category strategies for Strategic Suppliers

Expert – Level 4

Undertakes 'make v buy' assessments and develops outsourcing / JV strategies; capable of moving the market place where appropriate.





CATEGORY SPECIFIC

TECHNICAL

BEHAVIOURAL

SKILLS / KNOWLEDGE

REQUIRED

The effective procurement professional



Strategy development

Market analysis / creation

Market knowledge

Product knowledge

Supplier analysis

Specific commercial models

BEHAVIOURAL Legal

Analytical

Negotiation

Financial and economic

Commercial (payment models)

Process and regulations

Programme / project management

Supplier relationship management

Supply chain management

Contract management

Category management

Technology

Leadership

Tenacity

Judgement

Listening

Influencing & persuading

Networking & collaborating

Initiative & independence

Communication skills

Empathy

Creativity

TECHNICAL

CATEGORY




• Different jobs require different profiles within procurement or even between sub-sets of the procurement space

• Some category roles require a large amount of deep knowledge; some don’t (and technology is changing things here)

• Some roles very outward looking; some quite suitable for introvert analysts!



Part 3 – THE FUTURE OF PROCUREMENT

What might 2024 look like?

• Vineyards across the whole of England?

• Murdering robots?

• Drones delivering our take-aways?

• Old folks plugged into “the Matrix”?

• Organs re-growing?

• Or a major war based on religion, access to water, or the break up of the EU?




• Change in ‘direct’ procurement more limited but technology will have an impact

• Greater changes in indirect spend including better categorisation (‘indirect’ not a helpful term)

• Focus on Value Categories

• “The Business” takes a stronger procurement role - procurement sets overarching strategies, leads on strategic SRM, coaches, supports business




More certainly, we might predict:

• Procurement focus on value and risk, not cost reduction

• More buying of services, less of goods

• Use of blended models for providing resources (outsourcing, interims, specialists)

• CSR issues to the fore

• Democratisation of the supply chain

• Data, technology, information central to everything



Part 4 – WHAT THIS MEANS FOR SKILLS

• Data and information will sit at the heart of what “procurement” does, whether that is spend analytics, risk management, fraud detection, planning & forecasting, even SRM and innovation

• We won’t have to be Maths experts – but decent analytical skills will be key

• The ability to consider large amounts of data and information and turn that into action will be absolutely key (requires judgement and creativity as well as the analytical stuff)



Part 4 – WHAT THIS MEANS FOR SKILLS

Look at the three circles model:

• Technical – “traditional” sourcing skills become automated, devolved, transferred to users

• Category knowledge – still important in certain areas, less in others, but focused on “asking the right questions” not providing “the answers”

• Similar behavioural skills needed as today, but more focus on high-level influencing skills, collaboration: effective judgement, initiative and decisiveness also key



Part 5 – CAREER AND PERSONAL DEVELOPMENT

• There will be a lot more jobs on the service / solution provider side

• “Core” procurement functions in organisations where procurement is currently mature will decline in size

• Public sector numbers likely to decline further but still challenging roles – and more focus on contract management

• Will see some traditional roles continuing but also very new roles e.g. data detective, sourcing investigator ...




• A deep category skills route will still be attractive to many but over a whole career will often involve work in big organisations and with service providers

• The traditional route to the top will need a range of experience, with more focus on data, analytics and technology than previously

• Many category experts in indirect areas will end up in the

“business”




What will you need to succeed?

• Broad experience, some outside procurement

• Analytical skills

• Strong influencing skills (inc. empathy, listening etc) and sound judgement

• Collaborative approach – “it comes naturally to the next generation”



Part 5 – THE SUCCESSFUL PROCUREMENT EXECUTIVE OF 2024

ERM Graduate trainee

External spend analyst – “data detective”

Supplier innovation lead

Brand value manager (reports to Brand Director)

Sourcing Process Director

VP, External Resource Management

Part-time MBA

Based in Sydney




ERM Graduate trainee

External spend analyst (energy)

Category manager (energy)

Category lead energy – (Accenture / Proxima)

Client Director (Accenture / Proxima)

VP, External Resource Management (in-house)

Part-time MBA

Inc. 2 years in LA




The CPO (VP, ERM?) of the future:

• Business problem solver and opportunity seeker

• Personally credible at senior levels , experience internationally and outside “procurement”

• Understanding of what procurement data and technology can bring

• Leadership style includes coaching attributes, happy to devolve power and responsibility



Part 5 – THE SUCCESSFUL PROCUREMENT EXECUTIVE OF 2024 • Moving out from the procurement heartland increasingly requires the

achievement of outcomes through others. This is particularly (but not

exclusively) a challenge for indirect and services procurement .

• Behavioural skills are an essential foundation for advanced procurement, in

areas such as influencing, relationship management, leadership, etc.

• Top performers are recognised for what they achieve, but underpinning this

is strength in how they delivered the result (see right). What’s the value of a

great deal that no one uses or a stakeholder that is unhappy at the

outcome?

• Over reliance upon competition and power can alienate. Procurement

needs people who can persuade, who see the bigger picture, and who

deliver against all the odds.

• Leading or participating in cross functional or multicultural teams are

essential prerequisites for many, especially the larger global corporations.

KIM GODWIN




TIPS FOR THE TOP:

• CIPS will still be seen as a solid basis for a career – but more people may look at alternatives e.g. IACCM, IIAPS, MBAs etc.

• Experience outside the procurement function and internationally will become the norm for more senior people

• Demonstrated understanding of technology / data also essential for senior people plus behavioural strengths.

• Speed of change makes CPD vital, people will be expected to keep up with developments.



Real World Sourcing Scholarship

• 10,000AED towards any procurement based training

• Log on to the Tejari Education Network with the details you’ll receive tomorrow

• Complete the certification programme

• Answer as many questions right as possible

• The top 10 scorers will be invited to the Awards dinner in December where the winner will be announced.



THANK YOU!

Please feel free to contact me on

[email protected]

mailto:[email protected]

Procurement Skills & Careers, The Next 10 Years

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Transcript of Procurement Skills & Careers, The Next 10 Years