Price volatility, cost pressure, risk management, global supply chains and the constant need to do more with less... These are just a few of the elements that have led to procurement playing an increasingly important role in the boardroom.
Although the profession was naturally evolving towards a more strategic role, the financial crisis accelerated this transformation, with companies looking to procurement to find innovative ways to drive growth.
Procurement is often now expected to take the lead on risk management as well as elements of company growth – two difficult objectives to juggle. As a result, chief procurement officers (CPOs) are becoming key figures in the boardroom.
This change is reflected in the remuneration offered. Latest figures from the CIPS 2014 Salary Survey shows on average CPOs are now paid more than counterparts in HR, finance, IT, marketing and sales.
Yet despite its growing recognition, procurement struggles to attract the same quantity of professionals as other functions – particularly when it comes to graduates. There remains a perception that it is merely a bean-counting department that puts the brakes on projects and does not encourage innovation. Although this perception is changing, it needs to happen more quickly.
Graduates entering procurement have access to a wealth of opportunities that peers in other areas can only dream of. Junior analysts working for us, for example, are typically working with senior stakeholders within months of being recruited. This exposure not only gives the opportunity to learn from senior professionals, but also helps create a hierarchy founded on merit and not seniority.
Procurement also requires much collaboration with other sectors and departments. This outward focus ensures professionals have a solid understanding of how an organisation works as a whole – essential experience for anyone who aspires to the boardroom.
Another advantage is the wide skillset professionals develop. Procurement is typically involved in a multitude of projects from cost-focussed initiatives to more strategic activities. One assignment might involve benchmarking manufacturers in a given industry, whereas another might require supply chain analysis. Working in a consultancy further increases the likelihood of working on diverse initiatives.
It never ceases to amaze me how many professionals admit to having “fallen into procurement”. It is our responsibility to promote the profession to ensure it attracts the talent it deserves.
Procurement is an exciting career choice for anyone with the talent and ambition to drive a business forward. A difficult economic climate may have pushed the function to the forefront, however, the recognition it has since earned means it has cemented its leadership role. It is now up to those working in it to publicise this success and help attract future business leaders.
☛ Milan Panchmatia is director at 4C Associates