Monday 2 February 2015

Re-Inventing the Role of the Procurement Professional

Authored by Usama Shahid

As we see a world becoming more global in coming year, but even more challenging, Senior executives, including those in procurement, will have to be able to operate within this fast moving and complex environment, and will need to show a range of skills, knowledge and behavior. So we believe that the successful procurement professional of the future will need to develop both strong internal and external focus, and will demonstrate analytically and inter-personal strengths. These two dimensions combine to re-invent the role of procurement professionals:

The Diplomat – worldly, sophisticated, connected to global world
The Analyst – understanding global trends, data, markets and suppliers
The Investigator – using internally generated data to drive value opportunities
The Leader – working with internal colleagues to deliver organizational value

In this article, we’re going look at the how Procurement may develop over the next few years. In particular, we’ll consider the skills and characteristics that the future procurement professional is likely to need in our rapidly changing world. However, that doesn’t mean it is easy to forecast anything looking ahead, including our topic here. But we’re going to give it a try.

It’s also worth noting that different levels of seniority will need different skills, just as they do now. Again, we will try and generalize as much as possible, but point out those differences when they are particularly important.

We’ll  look at the wider macro-level issues that will impact on procurement’s role and activities. Then we’ll talk about what that means for the skill-set that the typical procurement professional might need, and finally we’ll briefly cover some of the likely consequences of this new model of a successful procurement person.

The ability to work collaboratively with colleagues and suppliers and think beyond cost into wider business and social value is vital. We see a more professional approach to procurement emerging. What does this tell us? Well, it is clear that technology has impacted procurement considerably, and that we’ve moved away from a focus on physical supply to much wider questions around value. We can also see how the linkages between what procurement does within the organization and outside it have developed, as we understand that both are important for procurement to succeed. The world we operate in is more complex and challenging; but we also have more information at our fingertips than ever before to help us make sense of it.

So, if we’re looking into the future, it seems reasonable to consider the wider landscape in which organizations and senior individuals will be working over the next few years. It is difficult to consider what will be needed from the procurement department (if it still exists) or the individual professional, without trying to understand the likely environment in which they’ll be operating.

Now, if we could predict economic factors with any success we would already be very rich, having made our fortune on the stock or money markets. But here are some macro-level factors that seem likely to be important in 2020. Success for many organizations will depend on access to scarce resources, and for larger firms in particular, an ability to work successfully with governments. Note the current situation in the financial services world, with regulatory issues, or take the example of large mining companies. Their ability to persuade national or local governments to grant them exploration or mining rights relies strongly on what they can offer in terms of developing the local economy. And a major factor within that is supporting and developing a local supply base. So procurement activities and executives play a key role in what is one of the most important and strategic drivers for the organization – winning the trust of government.

We see this understanding of what we might call “responsible procurement” as being key for the procurement person in future. And yet, responsible procurement must be allied with a hard headed, practical and pragmatic understanding of how to operate in a global environment. That also needs strong negotiation skills – but not a simple power based, “beat the supplier across the head” approach!

And when we look at that list of skills we defined, what they resemble is quite simply, effective leadership. Whatever level the procurement professional is at, the ability to work with key colleagues and deliver results is the essence of a Leader. Those skills will stand procurement people in good stead in their careers now and in the future.