A round table of leaders met to discuss the best ways to manage procurement talent in a digital age
The competition for talent has never been greater, procurement leaders agreed, and the choice for graduates is now wide open. A maths graduate who may have previously been destined for a career in banking or finance, could now be looking at joining a tech start-up, a retailer or entering procurement. Now, once you have the talent within your organisation, retaining it is a concern that cuts across industries and functions.
The leaders, from a range of sectors covering retail, automotive, public sector, B2B and finance, gathered at a round table event hosted by recruitment consultancy Russell Reynolds Associates in partnership with CIPS to discuss Today’s Digital Landscape and the Impact on Managing Talent. With many having already felt the rumblings of how automation and AI could affect the function operationally, they were discussing the ways for procurement teams to adapt their skills and looking to identify how best to grow the next generation of procurement leaders as digital becomes a reality.
Like it or not, digitalisation is coming
While the consensus is that a transformation is under way, views varied on how to tackle it in the profession, with some favouring the wait-and-see approach, letting others test the waters of disruptive tech. The alternative view was focused on customer-centricity enabled by technology, where failure to move quickly could leave you years behind your competitors.
Alf Noto, CPO at Deutsche Bank, pointed out that procurement has already been digitising operational processes like RFPs, and that it plays an important role in ensuring the right suppliers are in place to support a digital transformation. “There’s a strong role for people with procurement capabilities to work with suppliers and to build credibility with the stakeholders,” he stressed.
Rushing to purchase the latest tech might seem logical, but the correct infrastructure needs to be in place prior to taking on any kind of transformation, they warned. Alex Jennings, CPO at DS Smith, said this means achieving the right balance of processes, organisational design, and governance and compliance is in place.
“If any one of those things is out of kilter, it falls over very quickly,” he said. “As soon as you start to just focus on the technology or just bringing the top talent in, it’s not enough. If you don’t align the business or fix the processes, you don’t get the real value.”
When it comes to hiring talent to facilitate the transformation, it may seem like employing someone with experience at a disruptor like Google or Facebook would speed up the process. “That’s great from an innovation perspective, but the likelihood is that it will break too much glass in the process and the organisation won’t be able to go on that journey with you,” said Agnes Greaves, managing director at Russell Reynolds Associates.
Adapt to the flat structure
Career progression used to be relatively easy to map out, said Jorge Gouveia de Oliveira, managing director at Russell Reynolds, but businesses are becoming flatter, with employees making sideways jumps into different functions to build skills and experience. In theory, this means someone with five years of experience in a function could potentially end up with comparable seniority to someone who has been with the company for 30 years, he said.
Greaves doesn’t believe future CPOs will have to be tech experts or come from an innovation background to succeed. “You need to understand what might be coming at you down the line or be able to ask the right questions. If you can’t, you need to be surrounded by people who will help ask the right questions,” she said.
Digital transformation is also changing the way junior team members are working, they acknowledged, with graduates entering procurement pushing faster for change. And those new team members also have a lot to teach us, pointed out Nina Bomberg, global lead buyer at SEG Automotive – CPOs need to embrace the fact that lifelong learning is a reality. “People with experience can share this with young people. But those young people also have something to teach the guys that have been in the business 30 years. Suddenly we have to accept that learning is reciprocal. Just because you’ve worked in procurement for years, doesn’t mean you are the smartest person in the room.”
The growth in digitalisation of global trade
Digitally enabled trade is set to be worth $800bn to $1.5tn this year, according to Boston Consulting Group’s (BCG) report Global Trade Goes Digital. This represents 3.5% to 6% of global trade.
For individual market segments and firms, that share may already be much higher, with up to 70% of all global trade flows eventually affected, with 22% of trade, especially in service sectors such as travel, financial, insurance and telecoms most likely to trade digitally, says the report.
Cross-border data flows have been increasing over the past few years, from 100Gb per second in 2002 to more than 500 times that much in 2019, according to research from the US International Trade Commission. By 2020, consumers are expected to spend $1tn on cross-border e-commerce, says the McKinsey Global Institute (MGI).
But data flows are more than just consumer transactions and social media posts, says MGI, which points out that data flows are an integral part of the way companies now operate. Cross-border data flows already make a larger contribution to global GDP than the goods trade; a process MGI refers to as “digital globalisation.”