Four Faces of Procurement – the key success factors for procurement professionals

Today we’ve got more from our research paper, “The Four Faces of Procurement” (sponsored by Gatewit).  In it, we look at the skills procurement executives are likely to need in 2020 to meet the likely challenges our organisations will be facing then. 

In this excerpt, we look at key success factors for the professional of the not-too-distant future. 

One view is that procurement might virtually disappear – the Professor Lamming “black box” idea. Transactional procurement activities are largely automated, whilst budget holders take on some of the more strategic market or supplier management activities.

We don’t see this happening other than in a few limited areas.  Even as technology becomes more powerful, there is no evidence that the need for human judgement, or inter-personal contact, is reducing. Further automation of supply chain activities will increase in process manufacturing, but even here there will be critical commercial and judgemental issues (offshoring, outsourcing, reputation management, and capturing innovation from the supply chain). We don’t see machines being very good at handling these!

In other sectors, such as services or public sector procurement, managing the dynamics of the internal stakeholder and how that relates to the external market and suppliers will continue to be central for procurement. Making sure that a major public sector procurement exercise, for instance, meets the political and social goals of the politician in charge cannot be simply automated. It requires considerable technical and behavioural skill from the procurement executive to achieve a successful outcome.

So we don’t see procurement disappearing.  But we do think it needs to change.

It needs to move away from the dominant focus on unit cost reduction that still prevails in many organisations, to playing a wider and more fundamental role in the organisation. We see the procurement role as “managing the value the organisation gains from its dealings with the external world of suppliers and potential suppliers”.

And to do that, successful procurement executives will wear “four faces”, as they develop and demonstrate their skills at managing across two different dimensions. They are:

  • the internal / external dimension – facing both external markets and suppliers, and internally to stakeholders, colleagues and budget holders; and
  • the analytical / relationship dimension working in a data-driven, analytical manner when appropriate, yet also demonstrating a high level of behavioural skill and sensitivity.

Clearly, not all procurement roles will need the same balance. Junior procurement analysts may not need to worry about the relationship side of things early in their career. Top CPOs don’t need to be constantly down in the analytical detail. But the most successful procurement professionals, at all levels, will be those who feel comfortable operating with any one of our “four faces”.

(More later in the week - and you can download the whole paper here)

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