What skills and competencies should managers develop within their teams, so as to help them better exploit the power of digital technology?
It’s not difficult to see why managers should be asking themselves this question. After decades of being something of a technology laggard, procurement is suddenly engaging with a whole raft of powerful new digital tools.
Research carried out by Procurement Leaders in 2018, for instance, found 42% of procurement organisations were exploring big data, 38% were exploring predictive analytics, and 34% were exploring the Internet of Things (IOT). Other technologies weren’t far behind – blockchain, machine learning, supply chain event alerts and so on.
Moreover, significant numbers of organisations had gone beyond just exploring such technologies. With predictive analytics, for instance, 17% had either deployed a solution or were in the process of doing so. With big data, it was 20%. With the IOT, 18%. Again, the other technologies weren’t far behind.
But in each case, the skills required to leverage those technologies to their fullest extent are far removed from traditional procurement skill sets. The good news: while ‘hard’ technology-led skills have a role, so do skills already familiar to procurement organisations.
Technology disrupts the ‘win-lose’ mindset traditionally prevalent in procurement, points out supply chain technology veteran Julie Fraser, principal at Iyno Advisors. Instead, she notes, it offers benefits to both buyer and supplier – a ‘win-win’ proposition, in other words. But seeing the potential of that, and being receptive to the changes it brings, calls for ‘soft’ skills as well as ‘hard’ ones.
“Collaboration, communication, resilience, critical thinking, openness, flexibility, focus – more than ever, ‘soft’ skills are going to be important for procurement,” says Fraser. “Not only are younger people more likely to be digitally ‘savvy’, they’re also more likely to possess these ‘soft’ skills and competencies.”
Soroosh Saghiri, senior lecturer at Cranfield School of Management’s Centre for Strategic Procurement and Supply Chain Management, stresses the importance of flexibility and adaptability – again noting that these are more likely to be found in younger employees.
“The move to digital processes from manual paper-based ones can involve significantly redesigning how things are done, and some activities – signing purchase orders, for instance – simply might not exist any more. Older employees might understand the traditional procurement process very well, but not the new ways in which procurement is carried out.”
An obvious example is negotiation skills, adds David Food, an associate principal lecturer in procurement at the University of London’s Royal Holloway College.
“Going forward, what will be increasingly important is the ability to negotiate in situations other than ‘face-to-face’,” he says. “Digital transformation opens up many more possibilities: negotiation over e-mail, over Internet services such as Skype, and through interactions on e-commerce platforms. In each case, the usual body language clues won’t be present, which calls for different interpretive skills and abilities.”
That said, it’s not all about soft skills and competencies, say experts. ‘Hard’ technology skills will be needed – but not everywhere. How come? In many cases – think blockchain, IoT, supply chain alerts and e-commerce generally – procurement will be using digital technologies provided as a service: the important thing here is leveraging those technologies, which mostly calls for soft skills.
The main exception is analytics and technologies heavy in analytics, such as AI. Here, there’s a genuine requirement for people with ‘hard’ skills in data analysis and data cleaning, who can work with the complexities of technologies such as AI and machine learning.
“You can’t just pull a bunch of data together and throw AI or analytics at it,” says Rob Handfield, professor of supply chain management at North Carolina State University’s Poole College of Management. “You need people with skills in working with large data sets, and also people who understand procurement: they need to know what questions to ask, and how to interpret the output. And if those abilities can’t be combined in the same person, you’ll need people who can bridge the two worlds and act as translators.”
How to build these skills so they are combined in one person? Training in analytics can help. People can be redeployed from elsewhere in the organisation: think of finance specialists, for instance. Recruitment, too, plays a part.
That said, employers can assume entry-level procurement employees will increasingly possess such skills, says Wendy Tate, professor of supply chain management at the University of Tennessee, and co‑editor in chief of the Journal of Purchasing and Supply Management. Among educational institutions, she notes, curriculums are increasingly reflecting the growing importance of analytics to the profession.
“We’re being accused of moving away from teaching soft skills and towards these newer analytics skills – and we’re having to work hard to manage the resulting tensions.”
This article is a piece of independent journalism, written by an experienced journalist and commissioned exclusively by Procurement Leaders.