I love working in procurement! From my first day as a Junior Buyer I got the bug and never looked back! However, our profession is now at the crossroads of profound change.
Never before has the value that we can bring been needed more by our employers, as they seek to become more agile and rely more on their supply base. Yet we run the risk of irrelevancy if we do not adapt as the world around us changes.
It was with this in mind that I founded the Art of Procurement podcast last November. I interview thought leaders every Tuesday so that we can all benefit from their experience and perspectives as we seek to collectively elevate the role of our profession.
I want to share five key themes, or learnings, that I have taken from the first 50 episodes:
- Alignment holds the key to our relevancy
Alignment differentiates the haves and have nots in procurement. Yet, too often, we operate in a silo. It starts with the way our performance is measured. We are measured on a metric – cost savings – that is not the primary objective of our leaders and our internal clients.
We then look at a stakeholder as an opportunity for us to achieve our objectives, rather than help them achieve theirs. Every guest that I talked to agrees: to become or remain relevant, we have to be aligned with the objectives of our executives, and focus on helping our stakeholders excel in whatever it is that they do to contribute to our organisation’s value proposition.
- A two-tier procurement model is imminent
This is already occurring. Every activity that is not a core competency, that materially impacts our ability to bring competitive advantage through procurement, will go away. Some of it will be outsourced, but a lot of it will ultimately be automated out altogether.
A point that interviewees often stated, is that with this shift will also come a change in what we actually view as strategic. There will be no sacred cows.
- The value of the traditional skill set is diminishing
The executives that I talked to believe it will be our ability to bring a commercial mindset to our stakeholders, to influence and facilitate their use of external partners, to help our businesses build and retain a competitive advantage in our marketplaces, that will define our value in the future.
The new procurement skills most often cited are business acumen, relationship building, influencing and data analytics. CPOs tell me that it is easier to train procurement skills to an outsider who already has the soft skills needed, than vice versa. We need to step up or face becoming redundant!
- Collaboration is a competitive advantage
Is collaboration the latest procurement buzzword? The thought leaders I don’t believe so. In a world where third party spend is representing a larger percentage of revenue than ever before, an organisation’s success is becoming more and more dependent upon their relationships with their most critical suppliers.
The likelihood is that competitors in any market rely on many of the same suppliers to supply the products and services that materially impact their success. Competitive advantage will be gained by those who are able to foster true, two-way, collaborative relationships with those partners – where the sum of the relationship is greater than the parts. If you do not achieve this, your competitor will!
- Change must come from within
Too often we lament the fact that we don’t have a seat at the big table. As thought leaders repeatedly told me, the seat is there, we just have to take it. Members of the C-suite at most companies do not understand what we are capable of, and so we will never make progress if we wait for an invite.
We need to have courage to demonstrate the value that we know we can deliver in procurement if we focus on the right things – and change the conversation around how that value is defined and measured.
Doing so will make our desire to become the trusted business partner a reality across all of the organisations within which we work, rather than the isolated few.
This post was originally posted on the Procurious blog.