Utilising data in deal-making will be a more desirable skill for future procurement professionals than the ability to negotiate face-to-face, according to research.
According to a study, conducted by Barclaycard Payments, 78% of senior procurement decision-makers said data analytics was increasingly important in supplier talks. Two-thirds believed data analytics will overtake people skills in terms of importance in future supplier negotiations.
Speaking to SM, Marc Pettican, CEO of Barclaycard Commercial Payments, said CPOs will need to ensure they hire the right talent with a handle on “how to get the best out of analytics and insights derived from data”.
“They will definitely need to be able to embrace technology. The research shows 18 to 34-year-olds are twice as likely [than those over 55] to use a supplier management portal and I think that is just increasing. If we were to do the study again in a couple more years’ time, I think the data will shift even more,” he said.
Face-to-face supplier negotiation was still considered an ‘art’ by seven in 10 respondents, but 68% of buyers predicted negotiations will increasingly be conducted digitally over the next five years.
There was also found to be a generational gap. Procurement professionals aged over 55 were twice as likely to prefer face-to-face negotiations (62%) compared to 18-34-year olds (33%).
Almost half (46%) of decision-makers admitted to a lack of confidence when it came to negotiating face-to-face effectively. The main cause cited was not having access to enough data.
While Pettican does not believe face-to-face negotiations will completely disappear, increased use of data and digital tools could help to speed up negotiations, reduce the amount of face-to-face meetings required and support buyers to negotiate confidently.
“If you think about very big contracts or negotiations, they can be incredibly lengthy. But actually, with really robust data, analytical firepower, and insights, you could actually shorten those the timelines,” he said.
Another crucial area where data can assist buyers is through transparency and open discussions with suppliers.
“Transparency, ethics, fairness and how a buyer treats their suppliers is becoming increasingly important. There’s been a lot of column inches written about buyers’ practices,” Pettican added.
“Buyers are taking more consideration over their supplier relationships than they probably did in the past.”
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