A digitally transformed procurement organisation will do things in a very different way: that much is obvious. Obvious, too, is that the skills it will require in its people will be different, as well – ‘soft’ skills rather than ‘hard’, in the main, but perhaps not the same balance of soft skills that procurement organisations currently value.
But what will managers need to do differently to manage and get the best from a more digital‑capable team? Should they create different roles, organise teams in different structures, encourage a different culture, or embrace different key performance indicators? Here, answers are less obvious. And as different procurement organisations start to embrace the digital future of procurement, different answers to these questions are emerging.
Rob Handfield, professor of supply chain management at North Carolina State University’s Poole College of Management, for instance, notes a number of large businesses have established analytics-led ‘centres of excellence’ in procurement organisations.
“Often they’re bringing in data sets from other parts of the business, such as finance, manufacturing and transportation, because that’s where the big, interesting questions are. General Foods, Siemens, GE: these and others have set up such centres of excellence, specifically to house analytics specialists.”
Sometimes, the remits of such groups are even broader. Alejandro Alvarez, a partner in procurement transformation consultants Ayming, notes a number of the firm’s clients have established groups of people who act almost as internal consultants. They carry out data analysis, to be sure, but are also tasked with keeping procurement organisations abreast of best practice in terms of tools, technologies and processes.
“A given group might be called ‘procurement operations’, or ‘procurement strategy and process’: the names vary, but when you look, you see it is effectively the same thing.”
Nor is this a phenomenon that only applies to large organisations. At a more micro level, experts say, the same focus on specialisation can – unsurprisingly – still be seen. The digital world is just too far removed from traditional procurement for many people to be able to seamlessly bridge the divide.
“Not every good negotiator is going to make an equally skilful data analyst, and not every skilled data analyst is going to make a good negotiator,” says David Food, an associate principal lecturer in procurement at the University of London’s Royal Holloway College. “Some degree of specialisation is going to be inevitable.”
And not all those specialisations will be obvious, warns Soroosh Saghiri, senior lecturer at Cranfield School of Management’s Centre for Strategic Procurement and Supply Chain Management. While it’s easy to point to the need for more data analysts, for instance, it might be less clear that a growing reliance on automated e-commerce might call for roles for e-auction specialists.
“Once you get into combinatorial analysis and clustering, e-auctions quickly get quite complex,” he notes. “It would be naïve to expect a procurement generalist to bring the same skills and experience to the role.”
Likewise, adds Grant Millard, technology director at procurement consultants Vendigital, procurement organisations may be surprised by the extent to which they need to employ people skilled not just in analysing data, but in cleaning and integrating it with other data.
“Spend data and other procurement data can be difficult to work with,” he notes. “It’s not unheard of to find data that meets a technical standard of ‘clean’ but is still not capable of providing insights and informing analysis. As with procurement analysis itself, it’s working with data in a specialised procurement context, which calls for a special breed of person, not a generalist.”
Likewise, he adds, analytics specialists within procurement organisations are likely to be found across a spectrum: ‘big hitters’ with machine learning and AI skills at one end, doing what Millard calls “the heavy lifting”, and more junior analysts at the other end, skilled in computer capabilities such as SQL, Python, Tableau, and visual basic for applications.
Whatever their role, today’s younger generation of employees have a different view of reward and recognition, says supply chain technology analyst Julie Fraser, principal at Iyno Advisors.
“They expect a more collaborative and consensual approach in the workplace, with a more meritocratic approach to reward and recognition. They want to be recognised for what they are good at, and listened to when they share a perspective.”
This article is a piece of independent journalism, written by an experienced journalist and commissioned exclusively by Procurement Leaders.