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The concept of agility, with its emphasis on speed and flexibility, can be something of an alien concept to the average procurement function. Many operate on sourcing cycles that can stretch to as long as three months for even the most basic of spend categories, according to Procurement Leaders’ 2018 Category management and business alignment report report.
Yet businesses are moving in a direction that necessitates a nimbler approach and procurement has to support that.
“Increasingly, we’re seeing businesses say: ‘we want to move faster, we want to grow faster, and we want to be more innovative’, said Simon Geale, VP client solutions at Proxima, when Procurement Leaders caught up with him at the 2018 Agility and Transformation, held in association with Proxima in September, in Chicago.
"Ultimately, that means being more agile.”
The procurement function’s ultimate role is to help a business achieve its goals. If a company has its sights set on faster growth, the CPO needs to know how they will support the journey to hit that target. But, the question remains as to where to start transforming a function that has been designed to create certainty-through-process into a locomotive of agility?
First, procurement chiefs must assume the role of change managers, according to Geale. “CPOs have to have a clear vision of what they want to achieve [versus] where they are today,” he said.
Once executives have crystallised their ambitions, then it’s a question of putting in place measures to achieve them.
For inspiration, Geale eyes the sports world with its emphasis on marginal gains, or “small steps to hit the big goals,” as he puts it. “I’d say get a change model, think about how you’ll manage the change, believe in it and take your people with you,” he explained.
That may be easier said than done, though. Geale spoke about how he has met many visionary CPOs, who he said have an "unshakeable belief" in the future value proposition of the function. But, he has also encountered fewer senior leaders and managers who are as resolute in their outlook.
Yet if you accept that business today demands a faster-paced procurement function, it follows that the managers and the staff who have become accustomed to the kind of drawn-out processes outlined in Procurement Leaders’ research must adapt too.
“[Agility] is driving a bus through existing procurement talent frameworks, because we’re changing the type of people and the type of profiles we need. And I think there are two forces at work here: one is technology; then, at the leading end of the function, we’re getting much more into supplier partnerships, collaboration and developing innovation,” Geale said.
The onset of digitalisation has seen procurement chiefs introduce such unconventional roles as data scientists and coders to their teams, so they have the skills within their functions to properly capture, store and glean insights from data. But technological advancements are seeing procurement chiefs redesign old roles as well as introduce new ones.
Take automation and artificial intelligence, for example. The expectation is that these technologies will afford buyers more of the time they need to engage in supplier collaboration and innovation. But those activities demand different skills, too, in particular the ability to orchestrate internal and external teams around a common goal. In the world of agile procurement, the focus of the buyer is less on deal-making and more on managing the network, according to Geale.
“If you think about the core procurement skillset [compared with the skills associated with agile procurement], those two things couldn’t be much further apart,” he mused, “we really are developing a completely new textbook on some of the skills that we need.”
This article is a piece of independent writing by a member of Procurement Leaders’ content team.