Procurement is playing an increasingly important role in many businesses and the skills of those working in the function needs to evolve to reflect this.
The profession's increased involvement in wider business strategy has altered the skillset needed by those working in the function. Generally speaking this has manifested itself in a focus on skills related to relationship management and strategic thinking.
In this context, research conducted by the European Institute of Purchasing Management (EIPM) found chief procurement officers were on the lookout for candidates with a mixture of analytical and soft skills. In this piece, I have considered what this means for procurement and what the function's ideal candidate looks like.
The analytical skills selected by those surveyed included strategic thinking, total cost of ownership (TCO) and supply market analysis. Each of these is a clear indication of the greater responsibility placed on procurement within businesses. CPOs are still looking for skilled negotiators, but there is a shift towards hiring people with a greater understanding of the business as a whole.
These analytical skills echo the importance of procurement as a strategic partner, able to spot opportunities and drive growth. The function needs to be proactive and not only support and advise other internal departments, but also maintain an overview of the entirety of the business.
The analytical element is also vital in terms of taking advantage of the data which is now available to many procurement departments. If properly interpreted, internal data can provide significant gains in terms of supply chain optimisation, forecasting and many other areas.
The second set of skills selected by CPOs falls under the umbrella of what are typically referred to as "soft skills". This includes the ability to work in teams, influencing and persuasion skills and the capacity to implement change management. Each of these demonstrates a new emphasis for modern procurement functions.
This set of skills underlines the shift in focus from short term buying strategies and hard line negotiations towards suppler relationship management. In many sectors, suppliers have been pushed as far as they can go in terms of reducing costs. This has seen many businesses lean towards supplier collaboration as a means of driving growth.
At 4C Associates we often work with suppliers to build the relationships which lead to sustainable cost reductions and innovations. Having worked in a number of sectors, third party consultancies are perfectly placed to integrate best practice from other areas and forecast the impact of supplier initiatives. This type of project requires the mix of soft and analytical skills identified by the EIPM. Two qualities which we prioritise during our hiring process.
A need to change
In my experience those who excel in the present climate are the people able to combine traditional procurement skills with a strategic outlook and relationship building talents. It should come as no surprise that these all-rounders are difficult to find. This was highlighted in a recent survey carried out by ProcureCon Europe, where 60.3 per cent of respondents highlighted relationship management as a gap in their employees' skillsets.
To attract the right people, procurement needs to be more vocal about the role it plays in driving businesses forward. I touched on this before in a previous post and will reiterate it again. It is the responsibility of us in the procurement sector to highlight the good work being carried out. This is the only way the function will attract the type of people it needs and deserves.
☛ Milan Panchmatia is a director at 4C Associates