[Editor’s Note: We continue our “Throwback/Flashback” series with another look at a past entry on the skills needed for today’s procurement leaders.]
Over the past several months, we’ve featured a series entitled, “Skills for the Modern Procurement Pro,” wherein we’ve defined 14 core procurement skills and discussed their importance to one’s department and career. We’ve also shared with you how Chief Procurement Officers graded their departments’ performance, and how procurement pros can improve their skills. We’ve received great feedback from Ardent Partners’ community over the past few weeks, so we thought we’d give you a high-level, two-part summary of the skills in the series. Today’s summary will feature the last seven procurement skills.
Operational Procurement generally means processing purchase orders and managing them with both the supplier and the internal stakeholder whose need is being fulfilled. It’s the engine driving the procurement train. While operational procurement isn’t the most strategic area within a procurement department, it can be its most visible, with direct connections to many enterprise employees (requisitioners and approvers). Operational procurement is important to master early in your career so that you can be promoted out of this area in the future. At the procurement executive level, it is important to understand this process to ensure that process efficiencies and compliance rates are maximized. Despite the fact that CPOs gave it a fairly average score, operational procurement skills were the second-highest rated in this series. One obvious way to improve them is to expand your definition of “operational procurement” to include accounts payable. Mastering “P2P” puts you in better position for the future of transactional procurement than knowing just one of the “Ps”.
Supply Risk Management is the implementation of strategies to manage both every day and exceptional risks of supply based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity. Types of supply risk can include financial, operational, reputation, regulatory, business continuity, and political risk. Supply risk is clearly important to procurement, but the attention procurement teams pay to it tends to ebb and flow with business cycles and really only rise after high-profile disruptions. It behooves aspiring chief procurement officers to understand the importance of effectively managing supplier risk, and then embark on a long and consistent record of doing just that. Unfortunately, CPOs rated their staffs as below average when it comes to managing supply/supplier risk. Staying current on risk mitigation best practices can help you improve, as can volunteering to join or lead a cross-functional team focused on an area of supply risk.
Supplier Performance Management is the process used to track and improve supplier performance by measuring key performance indicators and enabling collaboration with internal stakeholders and suppliers. Best-in-Class organizations are much more likely to have a supplier initiative that is focused on innovation and/or performance improvement. They are also twice as likely to have a standardized supplier performance management process and three times as likely to have visibility into supplier performance and supply risk issues. Mastering supplier performance management is one of many critical steps in advancing up the procurement ranks. CPOs understand how critical it is to have visibility into your suppliers and their performance. Despite this importance, the average staff is below average when it comes to managing supplier performance. If you’re new to the procurement game or have fallen into bad habits, get engaged with your suppliers, stay engaged, and nip any small supplier “brush fires” in the bud before they grow into wildfires.
Leveraging Technology to Drive Business Value means exactly what it says – using technology to drive value. Enterprise technology is meant to drive efficiencies, effectiveness, and visibility making tasks more manageable, and enabling an organization to scale. It can also help us connect the dots to see obscure patterns, arrive at conclusions faster, or confirm what other sources tell us. Since roughly two-thirds of CPOs believe that their procurement departments are short-staffed, using technology to help scale resources, gain greater visibility, and make smarter decisions becomes a critical competency. Like data analysis and financial analysis, leveraging technology to drive business value is a must-have skill set in today’s business environment. Unfortunately, many CPOs feel that their staffs are well below average when it comes to leveraging technology. Fortunately, there are many self-guided ways a procurement professional can get up to speed in the modern business environment, in addition to taking in-person and online classes to get smart on various technology programs.
Business Consulting Skills represent the convergence of people, process, and technology skills. These skills are vital for procurement pros who are responsible for managing their company’s spend, but rely on the engagement and support of internal clients (e.g., business stakeholders and other functions) in order to succeed. Since procurement often lacks the authority to force an internal client to cooperate, it has to rely on its staff to influence company budget holders and get their buy-in. Finding a well-dressed problem-solver who can influence without authority and knows his or her way around an analytics suite can be harder than you think, and companies pay premiums for this blend of talent. However, CPOs rated their staffs as just below average for this competency. Practice makes better, and that goes for learning how to work with and influence people without authority. Conversely, project management, data analysis, and tech skills can be learned and honed on the job, or by enrolling in professional development courses.
Presentation Skills mean being able to present yourself in a clear, confident, and professional manner to those above, below, and beside you in order to gain influence. Presentation skills boil down to credibility, which will allow you to influence with or without authority, and allow you and your team to navigate inter-departmental collaboration. Successful procurement professionals, like all professionals, understand that one of the keys to success is to clearly, confidently, and effectively communicate their ideas and vision; otherwise, their personal brand looks weak and uninspiring. Unfortunately, modern procurement pros have just a little better than average presentation skills. But much of presenting better is just being better prepared – doing your homework, practicing your delivery, preparing answers to questions, and role-playing situations are great ways to prepare for important discussions or meetings. While public speaking is its own skill, it’s a critical part of developing good presentation skills, and there are professional societies dedicated to helping improve them (e.g., Toastmasters).
Project Management Skills, which the Project Management Institute (PMI) states “is the application of knowledge, skills and techniques to execute projects effectively and efficiently. It’s a strategic competency for organizations, enabling them to tie project results to business goals — and thus, better compete in their markets.” Procurement work (particularly sourcing) is often project based, so procurement departments must utilize their project management skills and processes on a frequent basis. It’s an inherent part of procurement, and can help procurement expand its influence within enterprises. Project management skills are critical to your career, too, as successfully managing procurement projects drives success for your team, adds weight to your resume, and gives you highly-marketable skills. It’s disappointing to see that CPOs gave their teams an only slightly above average score for project management. Luckily, general project management skills can be learned, honed, and mastered by on the job training, shadowing in-house project managers, or by enrolling in professional development courses, the latter of which are often reimbursable.
So there you have it – we hope you’ve enjoyed our “Skills for the Modern Procurement Pro” series. Next week, I’ll reflect back on the series and present our key takeaways and recommendations for the CPOs and procurement executives whose staffs struggle with these skills.
RELATED RESEARCH – THE PROCUREMENT RISING PODCAST
