The Future of Procurement is a subject that has attracted a lot of column inches from thought leaders in the past couple of years, but the debate has picked up some real momentum in the past few months resulting in it being a central theme at several of this autumn’s procurement events.
Following on from our feature on The Future of Procurement in the last report where we examined the opportunities that exist for the function to evolve from a savings dominated agenda, Andrew Daley was asked to speak at two such industry events. He was fortunate enough to see some great input from several respected procurement leaders and offer a recruiter’s perspective to the debate. The discussions centred around the future skill set, the use of technology as a catalyst for change and the implications for professional development, staff retention and talent attraction.
Starting at the SAP Ariba Procurement Summit which was sponsored by Deloitte, there were excellent presentations from Guy Hubball (ex CPO of BP), Marcell Vollmer (SAP Ariba’s Chief Digital Officer) and Graham Wright of IBM, all of whom touched upon the skills debate to some extent.
Taking the various points raised and seeking out areas of agreement, we are able to offer the following summary of what these leaders told the audience:
Technology is already offering a step change in procurement capability. Early adopters are working on their data strategy with the objective of embracing spend analytics capability. Such data will also drive machine learning and the use of artificial intelligence to automate tactical activities and provide a platform for better decision making and insights.
A key challenge for procurement leaders is to map out their future vision of what procurement will offer to their organisation and develop a plan to recruit, retain and develop the people who will be able to focus on the strategic value-added activities that will be enabled by the current and next generation of software tools.
Common themes in the vision for these strategic value-added activities include a Consultative Sourcing model along the lines of the trusted advisor approach. This will include greater business partnering, collaboration both within the organisation and externally with suppliers, opening opportunities for supplier led innovation.
The challenge for procurement leaders is this area is twofold:
Firstly, identifying the skills required to deliver these services, for example, better relationship management skills to facilitate improved business partnering, an entrepreneurial mindset for supplier collaboration, whether that be through existing staff development, external talent attract or a combination of the two.
Secondly, embarking on a change programme to educate the business stakeholders about what this new iteration of the procurement profession can offer the organisation and creating a fertile environment for their teams to deliver on this.
One of the many upsides for the leaders who embrace this challenge is that it gives them a huge advantage in both existing staff retention and external talent attraction.
Aside from the focus on data and the debate about the future procurement skill set, it’s clear from the discussions at this event that the use of procurement bots is now becoming more common and will see significant growth in the near future. It’s widely expected that this will evolve into greater use of voice recognition technology along the lines of Amazon’s Alexa.
Companies seeking to create their own bespoke solutions are at risk of missing out on the investment and development in the cloud-based solutions from the major vendors that will be regularly updated and improved as the vendors learn from their broad customer base.
AI driven tools like IBM’s Watson can be deployed to support functional leaders and Group HR to streamline and improve internal career development capability, digital skills development and recruitment from both internal and external sources. This is a potential game-changer for organisations who are serious about hiring the best available talent in a market characterised by skills shortages.
SAP Ariba is incredibly passionate about CSR. Its “Procurement with Purpose” mantra was a strong theme throughout and it’s a subject that we talked about in some detail in our last report.
Again the technology exists to dig deep into the supply chain for visibility. Justin Sadler-Smith talked about an automotive client who has visibility into seven tiers of their supply chain, so there’s some exciting potential there for organisations who need to think very carefully about this area. It’s also a capability that will prove very valuable in a post Brexit UK.
For all this talk about the potential for technology to be the catalyst for procurement to evolve, to offer more to its stakeholders and become a truly strategic function, the fact remains that the people who are able to talk about this from a position of strength and experience, rather than a future desire to achieve it, are in the minority as outlined above with the figures from the Deloitte CPO Study.
We estimate less than 10% of functions are making real headway on this digital transformation journey and as Andrew Daley ]told the audience at the SAP Ariba event: “Procurement leaders should be inspired by what they’ve seen from the profession’s leaders, inspired to go and develop their future vision for their procurement function in their organisation.”
All the technology tools are there, all the learning resources are available, all the thought leadership is fairly consistent in its vision for the future. It’s up to procurement leaders and the emerging stars who seek to emulate them in future to go out there and make it happen.
The good news for our clients is that we are mapping out the innovators and early adopters, tracking the people who have these skills, and working with the people are who are passionate about hiring them.
A week later Basare Connect offered a slightly different emphasis but an equally enjoyable range of topics to consider. The common theme was as you would expect – the opportunities that exist for procurement and finance professionals to embrace the digital transformation opportunities as outlined above.
UK&I Country Manager Louis Fernandes spoke about the meeting of mind and machine, the opportunities and the limitations that exist when humans work with the latest technology to embrace “Superfinance” as he put it.
This teed the audience up nicely for what followed and something that Basware do very well – their events have speakers from outside the immediate procurement and finance world to give a different perspective from many of the other technology vendors. They give the attendees something of an education and a great deal of food for thought. They are also a lot more interesting than a detailed walk through of the challenges of a P2P implementation project!
Last year it was Matthew Syed (The Times journalist and “Ping-pong guy” from the BBC podcast) who gave the audience a fascinating presentation entitle “Black Box Thinking.” This time it was Rohit Talwar, noted Futurist, Author & Advisor.
His presentation “AI and the Next Frontiers of Business” outlined a vision of some mind boggling possibilities underpinned by the development of AI that are potentially closer than we think. He also explained several examples where AI is already infiltrating our lives in many ways we don’t realise.
His work as an advisor to some major corporations enabled him to outline how the best organisations are typically looking 10 years ahead to what they might achieve with technology and explained how that enables planning now which in turn develops ideas we can act on now.
This might seem like an obvious concept but it’s one that few organisations have truly embraced.
Another point of interest that he raised was about how leadership skills will need to evolve, particularly for hybrid organisations that truly combine the power of humans with the potential of Artificial Intelligence. These organisations will present unique challenges that are still very rare now.
This observation about leadership was part of the presentation where he touched on the challenge of developing new skill sets for the new world, a subject regular readers will know we are passionate about and one that we’ll explore further below. It’s clear from what Rohit was saying that like procurement and finance, other professions clearly have their own challenges to reinvent themselves in a digital world.
Much as we’d like to cover the subjects Rohit talked about in more detail, we wouldn’t be able to do them justice in this report. So our advice is this: if you are interested in understanding more about where the technology might be heading in the next 5-10 years then you could do much worse that read one or more of Rohit’s books as part of your own personal development. We certainly intend to.
Amongst the breakout sessions later in the day was Peter Smith of Spend Matters talking about “What’s Left For Procurement.” Regular readers of Spend Matters will know that Pater and his colleagues have already devoted a lot of coverage to the future of procurement in an automated world. Their thought leadership on the subject is largely in line with what was debated at the SAP Ariba event and you can read more about it here.
Our own Andrew Daley followed Peter at the Basware event with his presentation entitled Climbing the Career Ladder in an Automated World. Picking up on the rather concerning data from the Deloitte CPO report mentioned above, Andrew’s message was to take responsibility for your own personal development and not wait for. He told the audience to embrace the new way of thinking before the opportunity passes them by, as the job market is likely to approach a tipping point where digital procurement skills will become increasingly valuable.
He talked about how people can utilise the myriad of learning resources available to them to help with this professional development and then “go find a visionary leader to work for.”
HIs audience debated the skills that will be required by procurement professionals in the future. Amongst those that were suggested were the ability to envision what the possibilities are for the future of procurement technology and a willingness to self-educate in the absence of suitable training.
Broader commercial skills, such as a wider understanding of the financial implications of procurement-led decision making and a more entrepreneurial mindset to help facilitate more business partnering, collaboration and seeking out supplier led innovation were also up for discussion.
Of course these subjects will continue to prompt discussion across the profession in the coming months and years and we’ll be sure to be part of that debate. We’ll also be looking for those people who are at the forefront of procurement evolution on behalf of both the hiring companies we work with and the individuals who seek suitable opportunities to advance their career with the right organisations.
To read the rest of The Procurement & Spend Management Insider where this report was originally published, you can download it here.