The Future of the Chief Procurement Officer… Is already here.
As written by Procurement Leaders, “DITx is Europe’s ONLY event specifically designed for procurement professionals wanting to capitalize on a whole new set of opportunities that disrupt yet provide new transformative, value adding capabilities” (Procurement Leaders 2017).
It’s rather procedural that if a member of our team attends an event, they come back and have a debriefing with the rest of the management team. No, we’re not running a military operation here, but there lies unmatched communicative value in after-action reviews.
Ashley, our CTO, summarized the event in a few concise talking points: the focus on disruption of procurement, coming implementation of technologies (such as AI), agility in the workplace and tech-savvy talent.
Hearing the summarization wasn’t much of a shock, but rather an affirmation of the on-going transformation occurring within procurement teams.
As procurement continues to change within its strategies, activities and technologies, the same shift is occurring to the definition of the function. Procurement teams aren’t what they once were, and they probably won’t ever be that traditional ideal again. Ahead of each team lies a fearless captain, a leader of the pack. But, without an acceptance to disrupt and transform from top to bottom, is there even an opportunity to change at all?
CPOs (Chief Procurement Officers) is the function in charge of leading this transformation. Many leaders within the procurement world are ready to realize the change that lies ahead. This much is clear after hearing about the CPOs that praised coming disruptions and transformations within procurement at DITx. This is a new breed of CPO.
This is The Future of the Chief Procurement Officer, and it’s already here.
The future of the CPO function, contains procurement officers that have a stronghold on the technology at their disposal.
Take CPO of IBM, Bob Murphy, as an example. He says that in order to complete his role successfully as a CPO, evolving within an ever-changing ecosystem is crucial. “I’m out there looking for ways to keep improving and keep adding value. I spend 25% of my time there speaking with other CPOs, leaders from industry and technology companies, so I can find out how they’re thinking around these challenges and how they’re motivating their teams,” claimed Murphy (Procurement Leaders 2017).
Pooling interest from other procurement leaders is a common methodology for getting ahead of coming trends, by breaking down cross-partisan boundaries.
Current and coming procurement technologies hold the potential to reshape both strategic and operational procurement. For this reason, those two elements landed as number 2 and 3 for ‘technologies to make an impact in the next two years’ according to Deloitte’s 2017 CPO Survey.
Furthermore, coming technologies have the opportunity to reshape what current procurement teams look like. Simply put, unassisted or cognitive procurement holds the potential to not just disrupt, but also replace elements of traditional procurement teams.
CPOs staying at the top of the food chain must remain hungry for technological trends and willing to digest the disruption that will follow.
Millennial Mindset & Tech-savvy Talent
The generation once mocked by old business will soon become the new face of old business.
CPOs will look to hire younger, and more agile talent.
I’m not saying that they’re going to drive around a big yellow school bus and tell all the 23 year olds on the street to hop on board their companies’ procurement teams. But, they are going to be more willing to the idea of hiring younger talent.
Two words: Technology & Agility
87% of CPOs polled in Deloitte’ CPO Survey 2017 agreed that talent is the single greatest factor in driving procurement performance (Deloitte 2017).
Advancements in technology, and the focus on digitally integrated procurement activities, are forcing CPOs to employ more tech-savvy talent. Typically this kind of talent skews younger. And, if they’re not younger talent, then you better believe they’ll have a high technological competency.
Jobs in the UK within the procurement and supply chain domain became 13% more populated in the third quarter of 2017 than that of the previous year. Of this talent hired, the most sought after positions were IT procurement specialists (Roger Walters UK Jobs Index 2017).
Head of cognitive procurement & digital sourcing at Vodafone, Virginie Vast, has stated when speaking of the company’s own digital transformation efforts, “30% of digital transformation is tools (technology), 70% is people”.
While millennial talent remains a coming trend for global procurement teams, there remain barriers to its actualization.
Laura Formigo, a procurement transformation analyst at UCB sees the marketing towards young talent as a major issue for enticing young procurement professionals.
“Procurement isn’t promoted well enough. From my experience, there wasn’t an option to study the function itself. In some universities, you could get some insight, but there isn’t enough focus on procurement. For this reason alone, young people don’t know about it. If it was better promoted and more visible, the function would be really appealing. Especially nowadays, where everything is evolving so fast and we need everyone to be connected to the market constantly, I think procurement will be really attractive to Generation Y,” Formigo remarked.
However, if pitched correctly, the career path of procurement is — realistically — quite attractive for younger generations. The capability for creating positive social and environmental change, through operational business practices, would excite the aware a socially responsible generation.
A Procurement Leaders eBook suggested that the best place to interact with this kind of potential talent is through various social media platforms. “According to the LinkedIn 2016 Global Talent Trend report “Data on how candidates want to be recruited,” millennials are 22% more likely than other generations to follow organisations on social media” (Procurement Leaders 2017).
Harnessing the talent of the millennial generation is sure to remain a topic of discussion, for the new breed for CPOs.
Procurement has quickly become one of the key priorities for the value added to brand, and top-line value.
CPOs have a responsibility to disseminate information and communicate the importance of their wants and needs with other management along the value chain. A CPO should be setting their strategic direction based on their expertise, not based on cost-driven decisions that trickle down. Look for this to become even more apparent in the coming years as procurement leaders begin to communicate their importance, and impact, upon corporate social responsibility within their organizations.
Furthermore, there will become an increasing need for CPOs to possess strong leadership qualities. In order to handle the education and communication of their expectations to new-younger talent, CPOs need to be ready to lead with empathy and social competency.
Alejandro Alvarez, director of operations performance at Ayming says it best, “No longer will people be able to hide behind the process they employ. We need people who can translate complex business needs, be a critical friend to the business, be magnetic, charismatic and engaging — words you wouldn’t necessarily expect of procurement teams. Increased automation, ironically, puts a premium on inherently human skills” (Raconteur 2017).
The furtherance of automation and technology has put a greater focus on human skills. Does irony come any more clearly?
So, ask yourself.
Will you become a CPO of the future?
Until next week.