As 2014 draws to a close, many of you may already be in the midst of planning your procurement function for the year ahead, and deciding how your team will be shaped in 2015. What will they achieve? What challenges will they face? And what will be expected of them?
In an attempt to answer these questions, and offer predictions for the coming year, we recently ran a webinar in partnership with IACCM entitled “What does the procurement team of the future look like?” (For those who missed it, I would encourage you to watch the on-demand version here).
The discussion offered insights into the ways in which many successful organizations are now structuring and managing their procurement function. The panel (Robin Shahani from TD Ameritrade, Tim Cummins of IACCM, Jon Hansen of Procurement Insights and I) discussed trends and best practices for building, managing and developing the procurement team of the future – encouraging leaders to enable their procurement teams to move from conventional to exceptional.
So what should the procurement team of the future look like?
- Deep category expertise: First and foremost is the ability to provide deep category knowledge. This should be the basis of any successful procurement function. Without this knowledge and experience, your team runs the risk of simply becoming a “jack of all trades”. And – whilst many procurement teams have heeded this advice in the direct space – those who work with indirect spend face the insurmountable challenge of effectively covering all possible categories (in which there are a lot).
- Non-procurement professionals: Similarly, flavoring your team with those not necessarily experienced in the art of procurement is also a growing trend. And, although it might sound counter-productive (Surely my procurement team should contain the most experienced minds in procurement right?) employing those from diverse backgrounds such as marketing and I.T. can provide a number of advantages over filling your team exclusively with those who are from a traditional procurement background. Having a fresh set of eyes to look at tired processes can often spark innovation in the most unlikely of places. As Robin suggested in the panel discussion; building a team with those that have a broad range of skills and experience, can be beneficial in a number of ways, from shaking up process, to shifting attitudes, to encouraging change. However, companies must err on the side of caution here. As Tim suggested, organizations who attempt this could be accused of “empire building” (he shared his thoughtsin much more detail here) and must instead ensure that these team members from non-procurement backgrounds have the right amount of training and expertise in the procurement field, to enable them to at least master the basics.
- Change agents: Employing those who have the right attitude can often be half the battle. Those who are willing to challenge processes, to be catalysts for change, and those who will not just continue to perpetuate the status quo, are an essential component of any team. But for procurement – a function that is constantly evolving in its approach – employing those who are ready and willing to drive change is essential. As Tim stated “the old mantras of control, compliance, commoditization and cost as being the key drivers will remain important, but they are inhibitors to actually freeing up an organization to become [a] creative animal”. Therefore, it is essential that the procurement team of the future is made up of those who are committed to driving the function forward, those who actively promote the new value proposition of procurement, and are passionate about changing the (often negative) perception of function.
- Great relationship managers: Again, the main challenge here is around cultivating the right attitudes. If your procurement team is focused on driving out savings at any cost (including the cost of the supplier relationship), this will ultimately lead to a un-collaborative fragile relationship that is not conducive to harnessing innovation. There has to be a notion of a trusted advisor. Suppliers must feel as though they can approach the procurement teams with new ideas and innovations. They must feel valued, supported, and coached. Effectively – the procurement team must strive to make the organization the customer of choice for all its suppliers. Increasingly, the procurement team of the future will find that their roles are far more about enabling trading relationships in a much more holistic way, and must be ready to rise to this challenge.
Evidently, it seems that one of the reoccurring themes is that of integration. Procurement teams, no matter how diverse their background, will continue to become much more integrated with both their suppliers, and the wider business, ensuring that they listen to both the needs of the business, and the voices of the suppliers.