The Talent Gap is Dooming Procurement – Notes From a Pub Debate

As I conclude my 3 core themes highlighting why procurement is doomed, I come to the final major challenge bucket, as I see it: that procurement skill sets are not changing quickly with the times. Unlike other areas of the business such as marketing, where executives went from being visually oriented poets only a decade ago to some of the smartest quant jocks and analytical leaders in the business, the skill set at the top driving procurement teams has not changed significantly in the same time frame. CMOs have evolved. CPOs have not – at least not at that pace, and the same can be said for their teams as well.

Yet despite this lack of progress, many of the same and new challenges remain in procurement – including supply risk management needs, commodity management, and services procurement – nearly all of which the majority of procurement organizations are only partially addressing today owing to a fundamental talent skills gap. Nor has procurement been effective at driving adoption across the board with technology solutions – the limited use of first-generation P2P solutions speaks to the graveyard of technology bones that accumulates when procurement leads such programs.

Finally, to make my case around talent, let me note that CPO salaries are barely outpacing inflation. While CFO compensation has gone up by double digits on average each year, CPOs have been lucky to see a 3% to 4% increase based on the various numbers seen. The market for talent is just that – a market. The clearing price for talent should reflect the willingness of participants, including CPOs and their teams, to accept an offer and companies to make an offer. And the offers companies and organizations are making remain lackluster – for a reason.

As I conclude my argument in the final post in this series, I’ll share a few final zingers.

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