3 Skillsets Procurement Needs for the Cognitive Era

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Spend Matters welcomes this guest post by Nick Lazzara, executive search lead at MRA Global Sourcing.

Procurement is in the midst of a revolution powered by data. IBM has termed this future state the “cognitive era,” a cognitive computing-driven time where computers can gobble up high volumes of structured or unstructured data without flinching and think like a human to deliver more meaningful business insights.

Since our tech will have human-like traits, many think some tactical positions will be automated, significantly adjusting the sourcing organization’s structure. In fact, Gartner predicts that by 2019, procurement automation will remove human involvement in 15% of digital tech spending. With the likelihood of people no longer managing the transactional procurement steps and removal of those roles, it becomes even more crucial to develop and refine skills that help you stay ahead of the curve.

To help procurement groups prepare for this upheaval, we’ll cover a few of the skills that will be focal points for procurement employers moving forward.

Pupil and Professor of Procurement Tech

As the technology landscape reaches its next iteration, tomorrow’s procurement professional must have an appetite to master the latest and greatest platforms for spend analysis, procure-to-pay (P2P), supplier relationship management, e-sourcing and more. According to a Deloitte CPO Study, 70% of CPOs are already heavily investing in innovative digital solutions to support procurement, and you can be certain those numbers will only increase in the years to come.

Procurement leaders will be counted on not only to apply this constantly evolving tech but also to implement and train end-users. Thus, they must be willing to attend tradeshows, webinars and demos to achieve deep understanding of these systems prior to selecting the best partners and implementing internally.

We recently spoke with a sourcing executive at a top manufacturer who noted that, with unlimited data at your fingertips that’s accessible more quickly than ever, what’s important is how you capture it and use it as a vehicle to make savvy business decisions that improve performance, margins and efficiencies. The best performers are also great story-tellers and data translators, who communicate their findings to functional leaders in ways a system cannot, which is why the human element is crucial in technology’s effectiveness.

Collaborative Supplier Partner

In the cognitive era, the vast, constantly growing pool of supplier data will be a giant asset and guiding light through the supplier selection process. As Deloitte points out, advanced artificial Intelligence will be able to highlight contract-related risks for goods and services, and flag social media posts that may be indicative of supplier product issues. Once final supplier(s) are selected, this information arms sourcing managers with the ammo they need to obtain favorable terms at the negotiation table.

That being said, while pointing to data can help make negotiations a lot more black and white, it takes a savvy individual to realize what terms are most important to a supplier and can thus be flexed to create a win-win deal. If strictly data is utilized to beat down a supplier into a unilateral contract, it can be a precursor for an adversarial relationship, whereas negotiating to achieve a fair outcome can deliver extra incentives for top performance.

On that note, technology will allow for greater supplier collaboration opportunities than previously imagined. In an Uberized society, it’s no stretch to imagine on-demand supplier feedback will soon be the norm, with messages shared instantaneously through texts, emails and apps. Shortened response time will minimize the effect of supply chain issues and ultimately drive higher service levels and happier customers. While the data through which we track supplier performance will certainly be automated, supply management leaders still need to be the ones crafting the message and tactfully sharing the feedback. By doing so, they can help strengthen the partnership by identifying process improvement areas and driving innovation.

Change Leadership

A final essential skillset required for the future is the talent of driving change. That’s not to say it isn’t extremely important now, too, especially with a constantly changing corporate landscape following a record-breaking $4.28 trillion in M&A activity in 2015. Another not-so shocker, those numbers are trending up as advanced data empowers corporate strategy leaders to make more informed decisions on company acquisitions, meaning merging of diverse processes, systems, people and cultures are imminent and commonplace. Procurement groups will soon look and feel different, and their role as a value partner will continue to shift toward strategic advisor versus enabler.

To lead through these changes, CPOs need to have the heft to quickly and accurately assess the situation, influence others and refocus on business imperatives when a game-changing technology is applied or a mega-merger goes live. At the manager level, the ideal change agent has the EQ to think outside the box and come up with creative solutions if the need comes to reshuffle their team by plugging in resources appropriately based on their mission-critical technical and soft skills. Having chameleon-like adaptability, a cool head and a clear vision of the big picture are imperative to avoiding knee-jerk reactions and keeping sourcing at the forefront of businesses through change.

The era of cognitive analytics is upon us, and it will undoubtedly bring change. It’s crucial to understand the evolving landscape and become a master student of the technology at our disposal, since procurement will be counted on to teach the functional leaders and end users. As some lower level procurement roles and tasks move towards being fully automated, it’s equally, if not more, important to improve your people skills. Notably as it relates to procurement, our collaborative SRM and change leadership abilities are at the epicenter. Honing these skills will improve your chances of advancement in the procurement employment world of the future.

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Voices (2)

  1. Jason Gabbard:

    I concur – interesting commentary and generally great post. Not sure why the knee jerk reaction is to IBM. Most of their cognitive stuff is little more than smoke and mirrors. There is no general machine intelligence today (no, not even DeepMind), and I guess if we stretch and call it “artificial intelligence” then what really matters are the use cases, where companies are hyper focused on small verticals and the application of cognitive type technologies to them, like we do at Counselytics with our contract discovery and analytics solution deployed in finance and procurement.

  2. Bill:

    Interesting thoughts and from my experience the comments about being able to apply, implement and teach about evolving technology are probably the biggest shift I see that most current procurement professionals are not ready for.

    More experienced people often have trouble with the technology while younger professionals may not have the core process understanding needed. Also being able teach effectively is something most purchasing teams don’t do beyond writing a policy or preparing a PowerPoint presentation.

    One other comment. It seems like often IBM is referred to as if it were the “gold standard” for all things business related. No doubt that they have some good things going but still I wonder how relevant they are to actual practice and capability for the majority of companies. Much like in the 80’s many Purchasing articles held up the automotive industry as the Purchasing benchmark.

    No doubt auto companies and IBM influence trends and thought leadership but reality is that at best most Purchasing departments around the world are operating with what is merely a digitized version of carbon copy typewritten forms and procedures going back to the railroad companies in the late 1800’s.

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