Webinar Notes: The Future of Procurement – The Human Challenge
This week’s webinar notes are from a February 3rd webinar hosted by SAP Ariba and presented by Ed Cone at Oxford Economics and James J. McDonald and Luisa Gonzalez at COACH. The event is available on demand here.
This webinar, part of the ‘Future of Procurement’ series which builds on Ariba’s Procurement 2020 report, combined Oxford Economics research on the changes affecting procurement with real-life color from the COACH procurement team. While the research was broad in scope, this webinar focused specifically on talent: where the challenges are, what kind of progress we are making, and what leads professionals to start careers in procurement in the first place.
The research results were shared in a way that made it possible to contrast the viewpoints of procurement executives and procurement practitioners. We commonly contrast procurement’s perspective with those of finance, operations, etc. It was a fascinating reminder that there is not one procurement perspective, but many. While it wasn’t made clear exactly what the root cause of the differences was, there is no denying that there are some very interesting contrasts.
Practitioners see the impact strategic procurement has on top line growth.
The first difference had to do with how our responsibilities are being affected by the evolution towards strategic procurement. All of the typical areas were listed: savings, spend management, risk, compliance, etc. A greater percentage of executives responded that these areas are affected by overall changes in procurement than practitioners did, sometimes by a significant margin. In other words, procurement executives feel that their ability to affect savings, spend, risk and compliance is being altered by increased strategic capabilities. There was only one category where practitioners responded more strongly than executives that strategy was affecting their results: top line growth.
Maybe these practitioners had not thought about how their work could affect the top line before executives started placing an emphasis on it. The question also included the word ‘measurable’ in it – as in having a ‘measurable impact on performance,’ so maybe executives recognize that while being increasingly strategic increases their ability to support top line growth, being able to track procurement’s contributions is nearly impossible. After all, if we are still struggling to track realized savings, how are we going to track additional revenue?
While everyone agrees people are a priority, they differ on the details.
Executives are focused on recruiting to build talent and capabilities, while the practitioners’ responses emphasized training and professional development. Practitioners also rated technology as having a more critical role than executives did – in fact, managers responded that technology skills are the second hardest to find in prospective employees. Later in the event, the presenters shared the results from a different set of questions on technology: namely, what categories of procurement functionality will be completely automated in the next 2 years. Executives were far more aggressive, with 10-15% more respondents (by category of technology) seeing full automation on the near horizon.
It is not hard to speculate as to where this difference comes from. While practitioners spend enough more time in procurement technology to recognize how important it is to their performance today, executives see the potential of an increasingly automated procurement future – where they can either reduce headcount to increase ROI or free up existing positions to do more strategic work.
We can always aspire to be more strategic.
Practitioners were asked what was holding them back from being more strategic. While it mostly came down to time – either being overbooked in general or having to spend too much time on administrative tasks – 25% of respondents admitted that they do not have the skills to be more strategic. We can take that number and combine it with information provided earlier in the presentation: that 71% of executives think strategic workers are hard to find and that 54% of practitioners say that they are either ‘proficient’ or ‘quite proficient’ at strategic work. Putting the pieces of information together tells us that 54% of procurement practitioners are strategic (or see themselves as such) and 25% admit to better suited to tactical work, leaving 21% that are ether average or below. If, as the premise of the research asserts, that procurement is becoming more strategic, being just over half strategic is going to be a constraint sooner than any of us would like to think. It might even hasten the executives’ predictions about automation.
But are we satisfied?
The one place in the webinar that the numbers were not split between executives and practitioners was employee satisfaction. That would have been an interesting comparison to see. While there is clearly a disconnect of perspective or communication between executives and practitioners, both groups agreed that outsourcing is not yet a high priority for getting the work done. Perhaps that is an indication that both groups see more work and change to be done internally before the introduction of third party resources.
Do you think your team has the same perspective at the executive and practitioner levels? Where there are differences, what is the cause: priorities, communication, blissful ignorance?
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