procurement skills & careers, the next 10 years
TRANSCRIPT
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Procurement Skills and Careers
Procurement Skills and Careers- The Next 10 Years
Guy Allen November 2014
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Procurement Skills and Careers
Agenda
1. Introduction
2. Procurement skills in the Past
3. Current models & thinking
4. The future of procurement (short version!)
5. What this means for skills
6. Career and personal development
7. Wrap up
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Procurement Skills and Careers
Introduction
The Real World Sourcing Series 2014 is a series of sessions covering hot topics for procurement professionals.
The Real World Sourcing Series is promoted and supported by Tejari, and developed by Peter Smith (Spend Matters) and Guy Allen (Real World Sourcing Ltd.)
Guy Allen started his procurement career with Ford Motor Company, moving through IBM, SmithKline Beecham and GSK , becoming CPO for Abbey National and VP Global Sourcing at Fujitsu before joining 4C as a Managing Partner. Guy has since left 4C and started his own consultancy, Real World Sourcing Limited.
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Procurement Skills and Careers
Part 2 – THE PAST
Where were we 30 years ago?
Look back before we look forward....
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Procurement Skills and Careers
Part 2 – THE PAST
• Procurement spent a lot of time on transactional processing
• The function worked largely in a silo
• Data was hard to come by and even harder to analyse
• Most supply from local or national suppliers
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Procurement Skills and Careers
Part 2 – THE PAST
• Skills were heavily process related
• Little thought of strategic sourcing, CatMan, SRM, spend analytics, electronic P2P...
• Analytic skills were still valued – but mental arithmetic was probably the most useful!
• Negotiation was often unsophisticated but skills in that area were appreciated
• Career progression was linear in most organisations
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Procurement Skills and Careers
Part 2 – THE PAST
Purchasing Clerk
Assistant Buyer
Buyer
Senior Buyer
Purchasing Manager
Head of Purchasing
Graduate entry?
“Too old for the shop-
floor” entry?
Typical Career progression
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Procurement Skills and Careers
Part 2 – CURRENT MODELS AND THINKING
• There has been a huge change in “procurement” over that time, and therefore in the skills needed to succeed
• There is no reason to think that there won’t be just as much change in the future
• But with the pace of technology change, we might see the same amount of change in the next 10 years as the last 30 ...
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Procurement Skills and Careers
Part 2 – CURRENT MODELS AND THINKING
• We’ve come a long way in the last 30 years in terms of procurement development
• There is a much better understanding of procurement skills and capabilities required to succeed in the profession
• But still some confusion and uncertainly about what really matters
• So now let’s look at some of the current thinking and models around skills and capabilities
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Procurement Skills and Careers
Part 2 – CURRENT MODELS AND THINKING
The Four Faces of Procurement – from a Spend Matters Paper of 2012
LEADER
INVESTIGATOR
DIPLOMAT
ANALYST
Internal External
Technical & analytical
Personal & Relationship
FOCUS
SKILLS
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End to end supply chain
analysis & management
Total cost management
and development
Strategy development and
execution
Contract development Negotiation Supply base management
Supplier relationship
management
Governance, statutory
and regulatory
requirements
Risk management
Functional risk
management
Business process and
operations
Systems knowledge and
experience
Programme and project
management
Management information Accounts payable
Data collection P2P systems and tools E-sourcing
Sourcing process Understanding customer
needs
Stakeholder relationship
management
People development Leadership Change management
Networking/leveraging
internal environment
Innovative and creative
solutions
Tenacity & determination
Strategic awareness Analysis and judgement Communicates with
influence
Yellow = Level 0
Amber = Level 1
Green = Level 2
Blue = Level 3
Red = Level 4
Part 2 – CURRENT MODELS AND THINKING
Courtesy Kim Godwin
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Skills/ knowledge / Behaviour
Strategy Development and Execution
Knowledge & understanding of relevant market, supplier & category strategies; ability to produce relevant strategies to meet business needs.
None – Level 0
No knowledge, experience or competency required in this area
Basic – Level 1
Ability to manage basic category low value, low risk supplier categories & identify appropriate category strategy.
Advanced – Level 2
Understands supplier categories & strategies for high value, low risk supplier categories & develops & implements appropriate strategy
Experienced –
Level 3
Develops, communicates & implements supplier category strategies for Strategic Suppliers
Expert – Level 4
Undertakes 'make v buy' assessments and develops outsourcing / JV strategies; capable of moving the market place where appropriate.
Part 2 – CURRENT MODELS AND THINKING
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Procurement Skills and Careers
Part 2 – CURRENT MODELS AND THINKING
CATEGORY SPECIFIC
TECHNICAL
BEHAVIOURAL
SKILLS / KNOWLEDGE
REQUIRED
The effective procurement professional
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Procurement Skills and Careers
Strategy development
Market analysis / creation
Market knowledge
Product knowledge
Supplier analysis
Specific commercial models
BEHAVIOURAL Legal
Analytical
Negotiation
Financial and economic
Commercial (payment models)
Process and regulations
Programme / project management
Supplier relationship management
Supply chain management
Contract management
Category management
Technology
Leadership
Tenacity
Judgement
Listening
Influencing & persuading
Networking & collaborating
Initiative & independence
Communication skills
Empathy
Creativity
TECHNICAL
CATEGORY
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Procurement Skills and Careers
Part 2 – CURRENT MODELS AND THINKING
• Different jobs require different profiles within procurement or even between sub-sets of the procurement space
• Some category roles require a large amount of deep knowledge; some don’t (and technology is changing things here)
• Some roles very outward looking; some quite suitable for introvert analysts!
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Procurement Skills and Careers
Part 3 – THE FUTURE OF PROCUREMENT
What might 2024 look like?
• Vineyards across the whole of England?
• Murdering robots?
• Drones delivering our take-aways?
• Old folks plugged into “the Matrix”?
• Organs re-growing?
• Or a major war based on religion, access to water, or the break up of the EU?
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Procurement Skills and Careers
Part 3 – THE FUTURE OF PROCUREMENT
• Change in ‘direct’ procurement more limited but technology will have an impact
• Greater changes in indirect spend including better categorisation (‘indirect’ not a helpful term)
• Focus on Value Categories
• “The Business” takes a stronger procurement role - procurement sets overarching strategies, leads on strategic SRM, coaches, supports business
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Procurement Skills and Careers
Part 3 – THE FUTURE OF PROCUREMENT
More certainly, we might predict:
• Procurement focus on value and risk, not cost reduction
• More buying of services, less of goods
• Use of blended models for providing resources (outsourcing, interims, specialists)
• CSR issues to the fore
• Democratisation of the supply chain
• Data, technology, information central to everything
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Procurement Skills and Careers
Part 4 – WHAT THIS MEANS FOR SKILLS
• Data and information will sit at the heart of what “procurement” does, whether that is spend analytics, risk management, fraud detection, planning & forecasting, even SRM and innovation
• We won’t have to be Maths experts – but decent analytical skills will be key
• The ability to consider large amounts of data and information and turn that into action will be absolutely key (requires judgement and creativity as well as the analytical stuff)
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Procurement Skills and Careers
Part 4 – WHAT THIS MEANS FOR SKILLS
Look at the three circles model:
• Technical – “traditional” sourcing skills become automated, devolved, transferred to users
• Category knowledge – still important in certain areas, less in others, but focused on “asking the right questions” not providing “the answers”
• Similar behavioural skills needed as today, but more focus on high-level influencing skills, collaboration: effective judgement, initiative and decisiveness also key
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Procurement Skills and Careers
Part 5 – CAREER AND PERSONAL DEVELOPMENT
• There will be a lot more jobs on the service / solution provider side
• “Core” procurement functions in organisations where procurement is currently mature will decline in size
• Public sector numbers likely to decline further but still challenging roles – and more focus on contract management
• Will see some traditional roles continuing but also very new roles e.g. data detective, sourcing investigator ...
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Procurement Skills and Careers
Part 5 – CAREER AND PERSONAL DEVELOPMENT
• A deep category skills route will still be attractive to many but over a whole career will often involve work in big organisations and with service providers
• The traditional route to the top will need a range of experience, with more focus on data, analytics and technology than previously
• Many category experts in indirect areas will end up in the
“business”
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Procurement Skills and Careers
Part 5 – CAREER AND PERSONAL DEVELOPMENT
What will you need to succeed?
• Broad experience, some outside procurement
• Analytical skills
• Strong influencing skills (inc. empathy, listening etc) and sound judgement
• Collaborative approach – “it comes naturally to the next generation”
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Procurement Skills and Careers
Part 5 – THE SUCCESSFUL PROCUREMENT EXECUTIVE OF 2024
ERM Graduate trainee
External spend analyst – “data detective”
Supplier innovation lead
Brand value manager (reports to Brand Director)
Sourcing Process Director
VP, External Resource Management
Part-time MBA
Based in Sydney
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Procurement Skills and Careers
Part 5 – THE SUCCESSFUL PROCUREMENT EXECUTIVE OF 2024
ERM Graduate trainee
External spend analyst (energy)
Category manager (energy)
Category lead energy – (Accenture / Proxima)
Client Director (Accenture / Proxima)
VP, External Resource Management (in-house)
Part-time MBA
Inc. 2 years in LA
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Procurement Skills and Careers
Part 5 – THE SUCCESSFUL PROCUREMENT EXECUTIVE OF 2024
The CPO (VP, ERM?) of the future:
• Business problem solver and opportunity seeker
• Personally credible at senior levels , experience internationally and outside “procurement”
• Understanding of what procurement data and technology can bring
• Leadership style includes coaching attributes, happy to devolve power and responsibility
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Procurement Skills and Careers
Part 5 – THE SUCCESSFUL PROCUREMENT EXECUTIVE OF 2024 • Moving out from the procurement heartland increasingly requires the
achievement of outcomes through others. This is particularly (but not
exclusively) a challenge for indirect and services procurement .
• Behavioural skills are an essential foundation for advanced procurement, in
areas such as influencing, relationship management, leadership, etc.
• Top performers are recognised for what they achieve, but underpinning this
is strength in how they delivered the result (see right). What’s the value of a
great deal that no one uses or a stakeholder that is unhappy at the
outcome?
• Over reliance upon competition and power can alienate. Procurement
needs people who can persuade, who see the bigger picture, and who
deliver against all the odds.
• Leading or participating in cross functional or multicultural teams are
essential prerequisites for many, especially the larger global corporations.
KIM GODWIN
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Procurement Skills and Careers
Part 5 – THE SUCCESSFUL PROCUREMENT EXECUTIVE OF 2024
TIPS FOR THE TOP:
• CIPS will still be seen as a solid basis for a career – but more people may look at alternatives e.g. IACCM, IIAPS, MBAs etc.
• Experience outside the procurement function and internationally will become the norm for more senior people
• Demonstrated understanding of technology / data also essential for senior people plus behavioural strengths.
• Speed of change makes CPD vital, people will be expected to keep up with developments.
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Procurement Skills and Careers
Real World Sourcing Scholarship
• 10,000AED towards any procurement based training
• Log on to the Tejari Education Network with the details you’ll receive tomorrow
• Complete the certification programme
• Answer as many questions right as possible
• The top 10 scorers will be invited to the Awards dinner in December where the winner will be announced.
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Procurement Skills and Careers
THANK YOU!
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