Thursday, September 02, 2010
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KNOWLEDGE MANAGEMENT TAGS
"Talent Management"
Analysis: Time to refocus on people development
by Malcolm Wheatley
With economies around the world apparently on the road to recovery, procurement functions are abruptly changing gear. The bottom line? 2010's leadership challenges are very different those that were faced in 2009.
"The dialogue we're having with customers - and the challenges that they are facing - are changing," says Jim Wetekamp, SVP of solutions strategy at procurement vendor BravoSolution. "The focus is changing from dealing with the recession, and issues such as cost reduction and supplier viability, back to the kinds of issues that were driving agendas eighteen months to two years ago."
In place of survival and cost-cutting, for instance, once-prominent issues such as supplier management and procurement-function organisation are re-emerging at the fore of executives' concerns. "They're wondering: Do we have the right organisation? The right skill sets? The right processes - and the right tools and capabilities?" says Wetekamp.
But that said, he stresses, it's not a case of purchasing-as-usual. "Some of the lessons learned during the past eighteen months aren't going to be forgotten in a hurry - they've become mainstream," he says. "Disciplines such as risk analysis, and considerations regarding supplier viability, remain very much front-of-mind."
Indeed; more than 75,000 businesses in the US have filed for bankruptcy since the beginning of 2008, and the number is rising - even as inventory and capacity reductions, lay-offs and hiring freezes have reduced suppliers' abilities to respond to fluctuations in demand, adds Kris Colby, a director in Ariba's spend management services group. Europe's brush with recession may not have been quite as severe, but the general picture is similar.
"Companies that tackle these issues head on, and attack risk now, will gain not only a valuable insurance policy against disruptions to their business, but also competitive advantage and substantial bottom line savings," says Colby.
Top tips: learn to operate in the 'new normal', don't think that supply risk is going away because the economy is improving, commit for the long haul and, critically, engage multiple stakeholders within the business. And, of course, this demands whole new skill sets from procurement teams.
"Make sure that any supply-risk initiative is driven by a cross functional team," advises Colby. "This will help secure C level support and resources and provide access to specialised skills needed to effectively assess risk and deliver results."
The message couldn't be more starkly put. For much of the last two years, procurement leaders have been externally-focused, engaged with suppliers as they have worked to assure supply and contain costs.
The challenge now is to switch that focus to an internal one, mustering cross-functional support from within the organisation to fight the same battle, but from a different standpoint. Will procurement leaders' persuasion and influencing skills prove equal to the task? Can they change gears as adroitly as they need to? Time will tell.
Procurement Tag - Talent Management
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