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ALL the video content from #BigIdeas2018 Sydney!

Strap yourselves in – we have HOURS of fantastic video content from the Sydney Big Ideas Summit to share!

Missed out on the action at #BigIdeas2018 Sydney? Never fear: you can still catch videos, top speaker quotes and more right here on Procurious. Simply opt in to the Digital Delegate group here.

Here’s a taste of the video content captured on the day.

Live from the sidelines:

Interview with Influence Nation CEO Julie Masters:

Interview with innovation and disruption guru, Gus Balbontin:

Speaker keynotes

David Gillespie, author of Taming Toxic People:

SAP Ariba Regional VP, Henrik Smedberg

There are plenty more videos in the Digital Delegate group – be sure to check it out.

Procurement 2030: Would You Report To A Robot?

Can leadership be automated? Will AI soon take over procurement negotiations, communications and problem-solving? Once thing is for certain – no skill-set will remain uniquely human forever.

Click image to get your copy of Procurement 2030: Level 3.

What is your human advantage?

With 42% of the average workload in procurement expected to be automated by 2030, now is the time to take stock of our skill-sets and focus on what makes us uniquely human.

Today, the automation of core procurement skills such as data analysis and market research is well underway. Lines are being drawn between those skills that AI has already mastered, those that will be automated in the future, and – critically – the areas where humans still have the advantage over machines … and that’s where soft skills come in.

However, categorising procurement skill-sets into 1) core skills for AI and, 2) soft skills for humans oversimplifies the issue. It ignores the fact that the creeping wave of automation increasingly includes soft skills such as communication and problem-solving. 

Robotic leadership?

Avoid the trap of thinking there are particular skills that AI will never be able to replicate. Surprising results in this research, for example, reveal that very “human” skills such as negotiation and even leadership are seen as likely to be automated. Robots are currently being trained to read and respond to the subtlest of human facial expressions.

With this in mind, our research identifies core procurement and soft skills where – for the foreseeable future – humans hold a unique advantage. The ability to influence others, build relationships and think creatively have emerged as stand-out skills that will enable us to future-proof our careers on the cusp of the robotic age.

Let’s recap.

Level One of this four-part series by Procurious and Michael Page UK examined the forecast for procurement and the threats and opportunities facing the profession. Level Two shifted the focus to the practicalities of procurement and supply chain management’s evolution against the backdrop of a technological revolution.

This report, Level Three, dives into the core procurement and soft skill-sets to understand exactly which parts of our roles are expected to be automated, and offers advice on the skills that top CPOs will be hiring for by the year 2030. 

AI and Core Procurement Skills

Determining customer needs, developing supply strategy and delivering stakeholder value are not only considered to be the most important core procurement skills, but also the least likely to be automated.

Procurement professionals who wish to develop their skills in determining customer needs (both internal and external) should work to improve their ability to build relationships, listen carefully, challenge assumptions, and always look for opportunities to connect the dots, help others and add value.

AI and Soft Skills in Procurement

Among the top four soft skills nominated as most likely to be effectively automated, problem-solving, leadership and negotiation have emerged as unexpected results. Robotic problem-solving is an entirely different concept to human creativity and innovation. AI has the superior ability to search and analyse data – for example, the answer to an engineering challenge may already exist in your files, but has been forgotten by human staff. Given the right search parameters,AI can identify the solution.

Would you feel comfortable reporting to a machine? Robotic leadership is a fascinating concept. Robots may very well have the ability to check your work and track your KPIs, but are not yet capable of motivating or inspiring others, or picking up on the human nuances that are a part of powerful decision making.

Negotiating robots already exist, and may soon be considered very useful for conducting low-level, emotionless negotiations that involve no ambiguity or complexity. For strategically important negotiations, however, human skills such as awareness, empathy and flexibility will always have the advantage.


Interested In Learning More?

This content-packed report also contains links to relevant thought-leadership from Procurious and Michael Page UK, including videos, blog articles, podcasts and webinars.

And don’t forget … part 4 of the Procurement 2030 report will be released before the end of the year!

CLICK HERE TO DOWNLOAD PROCUREMENT 2030: LEVELS 1 to 3.

6 Ways To Get The Most Out Of Your Procurement Career

Should you stay in procurement for your whole career? What skills should you focus on developing? How can you find a work/life balance? Check out these top tips from one of Australia’s leading CPOs, Thomai Veginis.

“The beauty of working in procurement is you can turn your role into anything”, says Telstra CPO Thomai Veginis. “You only limit yourself – people who want to keep the role small can do that, or you can push into other things. If you want to be an administrator who supports the business, that’s okay – or you can be a lot more proactive about how you drive the commercial agenda. Procurement professionals can create the vision for themselves.”

With 20 years’ experience in procurement, a team of nearly 300 people and a total spend of $14 billion, Thomai knows a thing or two about procurement careers. We asked her advice for ambitious professionals who want to get the most out of their current and future roles.   

  1. Move in and out of the profession

One of the reasons Thomai has been so successful is due to the skills she’s learnt outside of the profession. “You can – and should – move in and out of the profession. The skills are absolutely transferrable and personally, I’ve appreciated the profession more when I’ve been out of it.”

“A trait you sometimes see in procurement teams is a lack of empathy for people who don’t follow the process. If you want to develop empathy, go and do a front-line, customer-facing role, and you’ll understand how hard it can be. One of the compliments I receive is that people want to work with me because I understand the sense of urgency for the people in front-line sales. Gaining experience in that kind of role will help you be a better procurement professional.” 

  1. Develop awareness

Anyone going into a negotiation should know what motivates the supplier they are dealing with. “That’s the basis of your negotiation strategy”, says Thomai. “Ask yourself why something happened – what were the motivators? It’s important to be commercial, but you also need to become aware; both of your own reactions and how you influence the people around you. Awareness will help you read the play better for yourself, and your team.”

“There’s no such thing as a deal that’s 100% perfect – people are often too critical of themselves. Do that review at the end of the negotiation, but don’t be too critical on yourself. Everything is a learning opportunity.”

  1. Get Commercial

“Procurement is a great place to build up your confidence in a very commercial role”, Thomai says. “You’re dealing in the millions of dollars very early in your career – very few professions allow you to go into the deep end like that. You’re doing senior things that you’d expect senior people to be doing, which is why your confidence grows fast.”

Thomai also points out that not many other roles will give a junior professional the opportunity to interact with (supplier) CEOs and other C-levels so frequently. But you need to think commercially.

“The best way to get commercial is just finding someone who IS commercial and sitting in on some of the discussions they have with stakeholders. Be aware that sometimes the people with commercial skills don’t necessarily sit within procurement teams. Watch the preparation they do with suppliers and how they leverage relationships to get the outcomes. Observe, then participate.”

Thomai advises her team to draw learnings from the purchases they make in their private lives. “If you have to buy something for yourself (such as a car), what do you think about? What do you challenge? What’s the pressure that the salesperson is under? Try to understand what’s actually going on and take a 360-degree view, not just your side of things.” 

  1. Find a buddy who thinks differently

“It’s a good idea to buddy up with someone in your organisation who may not be your natural type”, says Thomai. “It’s important to have some affinity with a mentor, but a buddy should be someone who does things differently to you. They’ll teach you the lay of the land and show you different ways of doing things you may not have considered.”

  1. Get out there and meet your stakeholders

One of Thomai’s key pieces of advice for professionals starting a new role is to get out there and see your stakeholders as soon as possible. “Make time. Go out there, identify the contracts you’re managing, and understand the key players. It’s hard because we drown in work quickly, but you need to understand what your stakeholders’ imperatives and priorities are.” 

  1. Find a balance

“Over my career I’ve tried to manage my work-life balance. In procurement roles you can balance it better than people in a sales role who need to fit in with their customers’ schedules.” Thomai has worked in project roles focused on delivering to a customer which saw her working in the office from 8.00am until 8.00pm. “As a result of that work I had the opportunity to be promoted but realised I didn’t want to be in that career path because I couldn’t spend the time I needed with my children.”

“Procurement is an ideal career for parents returning to work. Not that you work less – it’s more about the opportunity to work flexibly in ways that work for you. Often leaders are seen as people who will take on anything and be invincible, but I’ve let my team know that I am human, too. They know that it’s possible to do the role and have a family.”


Are you based in Australia? Telstra CPO Thomai Veginis will share her leadership tips in a live interview with Procurious founder Tania Seary at the Sydney Big Ideas Summit on Tuesday 30th October. Reserve your seat now.  

Can’t make it to Sydney? Catch all the action online! Become a digital delegate.

4 Reasons Supply Chain Professionals Should Embrace AI

Embracing Artificial Intelligence (AI) will re-invent the way supply chain professionals work and help them to add enormous value to their organisations.  

In our hyper-connected global economy, where customers have endless options and high expectations, supply chain leaders are increasingly under pressure to fundamentally transform their operations in order to deliver on their brand promise and stay nimble in the face of rapid changes.

This is a significant endeavor. Supply chain professionals oversee complex, multi-enterprise ecosystems. They must ensure the quality, delivery, and availability of supplies, all while reducing costs.

Every day is an exercise in mitigating ordinary and extraordinary disruptions, too many of which they never see coming such as delivery delays, quality defects, political unrest, and natural disasters.

Artificial intelligence (AI) has enormous power to reinvent the way supply chains do business and deliver an incredible competitive advantage for practitioners.

1. Find the Right Data

 The skyrocketing amount of data scattered across supply chain operations is overwhelming and runs the risk of leading to greater inefficiencies as it inhibits access to real, relevant insights.

Supply chain leaders need end-to-end visibility with real-time, contextual insights that reduces the amount of effort required to see what’s happening across their network. Advanced AI can improve the ability for companies to combine and correlate vast amounts of external data like weather, customs clearance, and traffic with their own corporate and client data to get a complete picture.

AI means that supply chain leaders can see what they didn’t before and they don’t have to stitch together information from various data sources and transactions.

2. Act Faster to Mitigate Risks

AI gives supply chain leaders the confidence to act faster as they can now proactively predict and quickly assess aspects of their operation, such as responding to customer inquiries and adapting to changes in their business environment.

This is no small feat. Increased visibility and insights mean that manufacturers can drill down to any event and quickly understand the potential financial and customer service implications in real-time and receive recommendations on how to respond. The learning nature of AI enables greatly increased response times to future events as the system learns from each past mitigation.

Today, most manufacturers are reactive to supply chain disruptions – socio-political events, natural disasters or even daily occurrences like power outages and harsh weather. All disruptions force leaders to make last-minute decisions with little-to-no data, which can greatly affect the brand.

AI can comb the digital universe for indicators that those activities are presenting a supply chain risk. Not only can AI alert practitioners of the growing risk, it can also generate impact notifications and a playbook on what steps to take to mitigate the risk.

3. Uncover Opportunities to Drive Cost Savings

Finally, AI’s ability to identify opportunities to streamline supply chain operations allows for greater efficiency – often uncovering hidden opportunities to drive down operational costs.

One such example is helping supply chain leaders and their IT counterparts save crucial time by getting immediate answers to questions that matter most to their jobs, which in turn optimizes their decisions and actions.

Today, when a customer asks a simple question about the status of an order, a customer service representative has to pause and enter an IT request, a process that can take days. The IT Department then has to spend more time searching across multiple systems to piece the information together. The information is not searchable or readable to the business person.

AI uses natural language search to allow an employee to inquire about the order, without a go between in IT and get the answers faster.

4. The Smarter Supply Chain

A smarter supply chain is designed with disruption in mind. It connects disparate systems and events both in and outside of a partner network. It taps all the right data – even unstructured – and extracts actionable insights from it, in context, at astonishing speeds.

Practitioners can proactively identify, assess, and mitigate disruptions and risks today – and have confidence that they’ll do it all faster and more effectively tomorrow. AI provides the technology, tools and real-time, actionable insights to extend collaboration and achieve unprecedented visibility, while driving new levels of transparency and trust. The result? A supply chain architected for advantage now and well into the future.

Continue reading 4 Reasons Supply Chain Professionals Should Embrace AI

Data: You Complete Me

AI has the potential to shoulder a vast amount of the #procurement workload. But machines can only do the work for you if you capture all the data in the first place.
Last month Procurious hosted the very first Procurement Thought Leadership Forum in Chicago to discuss the evolution of procurement; what the future holds for the profession; how we can effectively determine the size of the global market; the importance of professional associations and maturity levels across the globe. 
The event, sponsored by Basware and attended by a number of the world’s leading procurement consultants, sparked some fascinating discussion and debate.

Dealing with Data

Remember that Tom Cruise movie – Minority Report? Eric Wilson, SVP Basware North America, certainly does. “In the movie Tom Cruise swipes things on a giant screen, he then predicts a crime and the team prevents it before it happens. It was pretty cool. Especially, back in 2002 when we didn’t even have touch screens on our cell phones and artificial intelligence (AI) was in the realm of science fiction.”

Of course, today we all use AI in our daily lives, whether we realise it or not. As Eric asserts “AI is the new electricity. When we replaced steam powered machines with those using electricity, we transformed transportation, manufacturing, agriculture, healthcare and so on; increasing efficiency tremendously.  AI has the same, huge potential, but nobody truly knows yet how it will change the world.”

Indeed, as  Eric pointed out it’s difficult to think of an industry that is not being impacted by AI;  IT, FinTech and Healthcare, to name just a few, are all being totally transformed. Self driving vehicles is an industry that is built entirely on AI.

But holding the right data is critical in order to harness the benefits of new technologies. If an organisation can turn all the data they hold into tangible customer value by leveraging machine learning and AI they can actually begin to benefit from these technological advances in the market. But to do so relies on having the right volume, quality and completeness of data .

“If you don’t have a view to the future when you are evaluating automation options, not only will you not achieve your business case for today, but three years from now, your system will be obsolete,” states Eric.  “It will be obsolete because it did not capture all of the data in the first place.”

In Eric’s mind there are no two ways about it: you can’t use AI if you don’t have the centralised data for those machines to learn from. “And so, my key takeaway now and always is: when you are putting together your RFPs for systems, data better be first and foremost on your mind!”

The conversation century

Elizabeth Linder, Founder and CEO of The Conversational Century joined Youtube in 2007 and often thinks back to that year, a significant time for Youtube, in order to understand the social media space.

It was an exciting and life-changing time for skilled amateurs. A time that had millions of people singing in their bedrooms or racking  up millions of video views for a commentary on something they would never otherwise have been considered an expert in. Youtube ultimately offered them the opportunity to be heard.

Elizabeth is a strong believer that the internet is the best place to build trust. “The people” ( i.e. you and me) have already got this all figured out. But the reason so many people still believe the internet is destroying trust is that our leaders are still so far from getting it right! We simply don’t have leaders at a political level that have invested in a voice on social media.

Some key things to remember when trying to start conversations online:

  • Most leaders fear that they have to move at an increased pace because of today’s internet culture. You don’t. Go at your own pace but keep people informed as you do it. It’s ok to communicate to people that “the discussions are still in progress” or “we don’t have information on this yet” so long as you’re communicating something!
  • Believe in the power of primary sources because the public certainly do. Hearing directly from the source rather than a paper adds a lot of value to your communication. If you’ve ever been quoted in an article, blog or feature you’ll know the producer of that piece never quite gets to the meat of what you were trying to say because youdon’t own the conversation or drive the discussion – they do!
  • Embracing in the hacker culture, i.e. making it up as you go along, is key. EU politicians, for example, only see social media as a tool for outbound communications and not for their inbound policy making. Hacker culture dictates that they need to consider the latter.

Elizabeth’s take away advice on owning the social media space? “Be yourself online and talk to people in a way that lets them in but not in a way so casual that you’re treating them like family.”

The value of professional certifications

Rick Blasgen, CEO – Council of Supply Chain Management Professionals (CSCMP) and Tom Derry, CEO – Institute of Supply Management ISM led a session on the evolution of procurement  and supply chain and the value of professional certifications.

Both leaders are very optimistic about what the future holds for procurement and supply chain professionals . “I think [these professions]  will be an embedded feature of every competitive global company around the world because they see so much of what goes on,” argues Rick. “We see it really growing into the fabric of successful companies.”

And Rick believes professional certifications “are a normal part of continuing to educate yourself and continuing to be knowledgeable about such a dynamic and ever-changing field.”

“One of the things important to CSCMP is to advance the logistics, supply chain and procurement professions and the careers of those working in them. The only way we do that is by being thought leaders and thinking about using the new technologies and tools that have never before existed.

“Our certifications will educate you on these things and then test that you have the understanding and can utilise the complexity within them.”
“An association used to function as the place where people felt obliged to belong,” says Tom. But nowadays he doesn’t believe professionals feel such a sense of needing to belong to an association  just for the sake of belonging  “They need value for money and they expect a professional body to provide tools and skills that enable them to be successful at a critical moment in their career.”
Sizing up the procurement market
Braden Baseley, ProcurementIQ Analyst discussed the size and maturity of the global procurement market, revealing preliminary  insights from their specially commissioned research report.
The research reveals…
  •  There are 554, 560 procurement pros working in the US, which make up 0.4 per cent of the workforce
  • The average salary for a US procurement professional is $72,199, which is pretty good considering the average US salary is approximately $55, 000
  • California, Texas and New York employ the largest number of procurement professionals
The report will also explore how procurement skills are changing and evolving and the skills that are most desirable in procurement teams.
The Procurement Thought Leadership Forum was sponsored by Basware. 

The 3 Rules Of Epic Storytelling

The key to creating real engagement – the type of engagement that actually leads to action – is deceptively simple. Learn how to become an EPIC storyteller with these tips from Influence Nation CEO Julie Masters.

 We are, by our very nature, storytelling creatures. It’s how we’ve been connecting since the Stone Age when we sat around campfires sharing our stories as a way of showing vulnerability and intimacy – and we’re hardwired for it.

According to Forbes, storytelling ‘the new strategic imperative of business’. Think about what happens in your mind when someone starts talking about statistics. Now compare that to what happens when they start telling you a story. Immediately you make yourself the lead character – how would I feel if that were me? How would I have responded? And there you have an emotional connection.

Looking at the explosion of social media and reality TV, not only are we storytelling creatures, we’re suckers for real stories – full of ups, downs and lessons learned. In the business world, regardless of whether you’re putting together a pitch presentation, vying for venture capital funding or presenting to the Board – your primary objective should be to get people emotionally connected enough to your message to take action. To help you get started as an epic storyteller – here are my three top rules:

MAKE IT REAL

Stories are so much more impactful when they are real – especially if they happened to you. A speaker I work with once said, “You don’t tell and retell a great story, you live and re-live it”. It’s hard to live and re-live a story that isn’t yours, however, we don’t always have the opportunity to take inspiration from our own lives. I recently coached a CEO who had to present at an industry convention, she needed to share how the digital revolution had fundamentally changed their consumer. Instead of jumping into some hard-core statistics, we took a different approach. She said “I want to introduce you to Emma…”

Emma wakes to the sound of her iPhone alarm. She quickly checks the weather forecast and emails before getting out of bed. She reads the news on her iPad, drops the kids at school while listening to a favourite podcast, orders the weeks groceries online… and on the story went. Every single statistic was covered by Emma’s journey and at the end the question was posed: “Who here has a day that resembles that?” Everyone put up their hand. In under 3 minutes, she had the room convinced that digital devices have completely reinvented our lives. Compare that to 10 minutes spent going through statistics and figures – which is the most compelling?

MAKE IT COMPELLING

Some of us are born with the ability to tell a really great story, but it usually requires three pints and a shot of tequila. For the rest of us (and where alcohol isn’t an option), the answer is to sharpen your skills. The key to a compelling story is energy. If you’re speaking in front of people, start by using your whole body. Remember the ‘live and re-live’ rule – how would you tell this story if you were literally re-living it? How would you use your hands? How would you move your body? How would your voice change? In the most recent studies, body language accounts for a huge 55 per cent of how a message is received, so harness its power and start literally taking up more space.

If your story is going to be consumed on a digital device rather than in person – look at using video as a storytelling tool. With video content predicted to account for 80 per cent of internet traffic by 2019, customers are sending a clear message. Don’t tell me, show me. And if you want me to amplify your story by sharing it – tell me on a platform where I’m already actively sharing content. It might be Snapchat, it might be Instagram stories – look to where your target market is already hanging out and start a conversation.

(If you want to learn more about powerful ways to use your body – Harvard Professor Amy Cuddy delivered an incredible TED Talk on the topic of ‘power posing’).

MAKE IT ACTIONABLE

This is one of the biggest mistakes I see from great storytellers. The story ends – there’s an eager and engaged audience – ready to take action – and then – nothing. The most effective stories are the ones that finish with a simple request.

I recently watched a documentary about the alarming decrease in the whale population. It lasted an hour and, by the end, I was willing to do anything in my power to help. The credits rolled and that was it – no way for me to turn my new-found passion into action. Compare that with the Dolphin Safe label campaign. In this case the action was simple – only buy cans of tuna containing this label. A simple request that has permanently changed my buying behaviour.

I interviewed Daniel Flynn the Founder of social enterprise Thankyou a months ago on my podcast. He was telling me about the beginnings of Thankyou – when he knew the core to it’s success would be to get products stocked by a major retailer. He set up a meeting with 7/11 and – in the two weeks before the meeting – ran a social media campaign asking consumers to do one simple thing. To let 7/11 know that if they stocked Thankyou products – they would buy them. Within one day, 7/11’s social channels were flooded with support and within a few weeks – their products were stocked in 7/11s around the country.

The key to creating real engagement – the type of engagement that actually leads to action – is deceptively simple. Tell compelling stories – on the right platforms – and make simple requests. In a world where we’re overloaded with information. Epic storytelling will continue to be the only key to cutting through the noise.


#BigIdeas2018 speaker Julie Masters is a globally recognised expert in influence, authority and thought leadership. She is the CEO and Founder of Influence Nation and Founder of ODE Management – responsible for launching and managing the careers of some of the worlds most respected thought leaders. Julie is also the host of the weekly podcast Inside Influence.  http://juliemasters.com

Are you in Australia? There’s still time to reserve your seat at the Sydney Big Ideas Summit on Tuesday 30th October. Book now: http://www.bigideassummit.com/big-ideas-sydney

Can’t make it to Sydney? Become a digital delegate and catch all of the action LIVE right here on Procurious. Digital delegates can download a free copy of Julie Master’s ebook: The Influencer Code. https://www.procurious.com/big-ideas-summit-sydney

5 Challenges in Indirect Procurement

Indirect spend is a notoriously difficult area to bring under control, but it also offers enormous saving potential … if you can get it right!

There’s a lot of buzz online at the moment about indirect spend because we’re barrelling towards one of the major events for indirect on the U.S. procurement calendar: ISM INDIRECT2018.  We’ll have a look at the conference line-up in a minute, but first, let’s review some of the enduring challenges for those tackling indirect spend. 

Five enduring challenges in indirect

Real change happens when CPOs get involved and influence buying behaviour across the entire organisation – and in every category. But the hurdles they face include:

  1. Lack of investment: Indirect procurement is typically under-invested, especially given its potential to create significant savings for organisations.
  2. Lack of capacity: The indirect procurement team has to focus on sourcing commonly purchased and high volume goods and services, as well as transaction processing.
  3. Lack of mandate: The primary responsibility for most indirect procurement categories often lies within the business units. For some categories, such as travel, it may not even be clear as to who actually owns the policy.
  4. Lack of awareness and low visibility of indirect procurement: Indirect procurement is often seen as less important than direct procurement in the eyes of senior executives. It is seemingly even less important at the business unit level. Many stakeholders view an indirect procurement professional’s role as the ‘rubber stamper’ at the end of the process.
  5. Organisations lack the skills required for effective stakeholder management:The indirect procurement function has to find ways of working more effectively alongside the various business units and stakeholders within each business unit.

INDIRECT2018

What happens in Vegas … will definitely need to be brought back to your organisation and implemented at the earliest opportunity!

ISM’s INDIRECT2018, running from 7-9 November at the ARIA Resort & Casino in Las Vegas, is being billed as the essential educational event for indirect procurement professionals.

Speakers include:

  • Rahul Vijay, Head of Global Tech Sourcing at Uber – Telecom, Internet of Things and Sourcing: Powering 10 Billion Uber RIdes
  • Karen Fedele, Head of Procurement Centre of Excellence, Shire – Stakeholder Engagement: Unlocking Procurement’s Value
  • Jessica Rosman, VP Procurement at Caesars Entertainment – Sourcing in a unique and challenging environment – while sustaining the environment

Also on the program:

  • The future of indirect technology
  • Transportation costs in a challenging economy
  • Balancing successful travel relationships
  • Techniques for complex supplier negotiations
  • Reducing risk exposure
  • Roundtable discussions
  • Supplier showcase

INDIRECT2018 also includes a strong focus on nurturing the up-and-coming generation of indirect procurement gurus, with five student presentations and thee announcement of 2018 scholarship winners.

Register now for ISM INDIRECT2018

Deep-Dive: Where To Find The Best-Paid Jobs in Procurement

Want the best-paid job in procurement? The upshot from two key reports: be prepared to move, think strategically and develop your soft skills.

At a time of supply chain globalisation and the frenetic adoption of e-commerce, procurement professionals are emerging from dusty back rooms and warehouses to claim their rightful place as key facilitators of doing business.

The advent of online giants such as Amazon is placing an increased emphasis on moving goods swiftly into consumers’ hands – often on the same day. At the same time, borders are becoming increasingly irrelevant as multinationals seek to source goods and services in ever-efficient ways.

Given the seismic changes, it’s a great time to work in procurement.

But be warned!

The increased demand for skilled professionals does not necessarily translate into greater monetary rewards, let alone more perks, with some sectors (or geographies) offering better conditions than others.

Two recent major salary surveys highlight the remuneration trends – and discrepancies – across the key English-speaking jurisdictions of the UK and the US.

Australian and Irish surveys also support the overall picture of excellent demand outstripping supply in most markets.

In some cases, employers are battling to find the right candidates. But the surveys also show the environment is fast evolving and practitioners need to upgrade their skills constantly.

On a disappointing note, the surveys also show the empowerment movement that emerged from Hollywood’s “Me Too” push is yet to translate into equal salaries and opportunities for women.

Some employers also bemoan a dearth of soft skills. In other words, job candidates may be technically proficient but are poor communicators or lack emotional intelligence.

The bottom line – UK salaries

Brexit is increasing demand for procurement professionals in the British market, according to the annual survey undertaken by the UK Chartered Institute of Procurement and Supply (CIPS), in league with the recruitment firm Hays.

As CIPS explains, Brexit (Britain’s withdrawal from the European Union) is already creating supply-chain upheaval, with one in seven EU businesses with UK suppliers already sourcing these goods and services elsewhere.

The spectre of protectionism and tariffs promises even more upheaval.

“Professionals will need strategic skills, data management and a steady disposition to help businesses find their way through the particular challenges faced by their organisations,” CIPS says in its 2018 Procurement Salary Guide and Insights.

Overall, 68 per cent of the 4000 survey respondents earned a pay rise in 2017, averaging 5.1 per cent. That’s 4 per cent more than the previous year and well above the 2.2 per cent increase for British toilers overall.

At the top of the tree, Chief Procurement Officers (CPOs) earned an average £124,000, 11 per cent higher than the previous year’s £112,000.

Experience, overall, is being rewarded: of respondents with more than two decades’ experience, 72 per cent received a pay rise compared with 53 per cent for those with fewer than two years’ experience. However, the latter received an average 6 per cent rise compared with 4 per cent for the veterans.

The bottom line – US salaries

Naseem Malik, managing partner of Virginia-based recruiter TYGES Elite describes the US market for procurement staff as being at an all-time high. Latest reports suggest there are 650,000 more openings than there are qualified workers.

“The procurement market has been tightening for the past couple of years and is definitely showing no signs of abating,” Malik says.

The US Institute for Supply Management’s 13th Annual Salary Survey presents a more cautious picture, showing overall compensation (pay) grew 1.7 per cent in 2017, to $US117,425 from $US115,440 previously.

This was less than the 5 per cent increase recorded in 2016. However, median compensation rose 4.2 per cent to $US100,000 ($US96,000 previously).

At the rarefied end, average pay for the top 5 per cent of earners fell by 4.5 per cent to $US368,505.

Emerging practitioners – those with less than four years’ experience – could expect $US77,996 on average.

Of the respondents – 2979 in all – 85 per cent saw their base salary increase, with only 5 per cent taking a salary haircut.

Of the former, the average increase was 5.3 per cent, while those who missed out saw their pay packet decline 7.6 per cent.

Malik says that US entry level to mid-management level salaries have steadily increased by 8-10 per cent annually since 2016.

“When it comes to senior levels, we are finding their total compensation packages have stayed competitive, with a focus on enhanced long term incentives as a reward.”

Mind the (gender) gap

Sisters might be doing it for themselves, but it looks like they will need some help at a structural level to reach pay parity with their male peers.

“Across all industries there’s a gender pay gap; it’s talked about daily,” says Tony Megally, general manager of specialist Australian procurement recruiter The Source. “That’s an ongoing challenge and a conversation we need to have.”

The firm surveyed 1000 industry professionals and found 59 per cent were male and 41 per cent were female. At leadership level, the imbalance rises further – to 62 per cent male and 38 per cent female.

Megally finds that men are far more willing to nominate an ambitious salary, “whereas females feel they need to be an expert and have all the knowledge in order to ask.”

As a result, the firm is consistently coaching female candidates to push for what they think they deserve and to back themselves.

The UK report revealed slippage in progress, however, with 71 per cent of men and 64 per cent of women receiving a pay rise in 2018.

This compared with a 65-63 per cent split in 2017 and marks a regression to 2016 levels.

But of the women who did win an increase, they did better than men: a 5.3 per cent rise as opposed to 4.9 per cent.

“The most striking pay disparity remains at advanced professional level, where men earned 33 per cent more than women (£85,398 compared with £63,986), a pay gap that is even larger than last year’s 25 per cent,” the CIPS report says.

However, women earned more than men in a number of operational and tactical roles, including as procurement officers, contract officers, assistant buyers and purchasing assistants.

The US study shows a similar disparity at all seniority levels.

Male chief procurement officers earned an average $US279,413 compared with $US221,137 for their female counterparts, a 26 per cent disparity.

At procurement manager/sourcing manager levels, men earned an average $US119,492 compared with $US103,903 for women, a 15 per cent difference.

There’s always a ‘but’: average salaries for females increased 1.8 per cent to an average $US98,780, pipping the average male increase of 0.9 per cent. Then again, the average male salary of $US127,908 was that much higher in the first place.

TYGES Elite’s Malik says the US gender gap is shrinking, with the trend likely to continue because of new laws in several US states that ban employers asking candidates what their current salary is.

“Companies now have to put a competitive offer on the table to ensure they close the candidate,” he says. “Otherwise, they lose out to companies that have a better handle on the marketplace.”

In Australia, Jigsaw Talent Management reports an average salary of $A172,730 for males placed this year, compared with $A153,139 for females. That’s a difference of 13 per cent, compared with 11 per cent four years earlier. But the story is nuanced, with females out-earning males in the highest category ($A200,000 and above) and the lowest category ($A100,000 and below).

According to Nikki Bell, the chair of the CIPS Congress, the profession does not appear to be bucking the “ever present” gender pay gap despite its reputation as enablers and innovators.

“We simply must do more to enable skills and career opportunities and eradicate any diversity-related road blocks,” she says.

Where to find the best (and worst) positions

The ISM survey shows that taking a global approach helps bolster the pay packet: international sourcing operatives topped the scale at $US140,565 overall.

There also appears to be industry appetite for aspiring James Bonds, with ‘market intelligence’ professionals earning an average $US139,472.

For a market intelligence chief – the industry equivalent of ‘M’ in the Bond movies – the average pay was a chart-busting $US337,132. (Keep that confidential, of course.)

While candidates might not rate social responsibility highly on their list of imperatives, it pays – literally – to take on those roles. A sustainability/social responsibility officer earns an average $US135,300, while a chief supply chain sustainability officer (or equivalent) earns $US325,992.

In the UK, the best industry sub-sectors for getting a raise were defence (88 per cent of staff), pharmaceuticals and life sciences (85 per cent), hotels and catering (83 per cent) and fast moving consumer goods (81 per cent). But the best pay rises in quantum terms went to workers in the telco and marketing/advertising/PR sectors, with increases of 8 per cent and 7.4 per cent respectively.

The ISM survey reveals a vast disparity between salaries depending on industry sector.

The best sector to be in is healthcare, which would appear to be generally impervious to economic conditions. With ageing western populations, it’s also a natural growth sector.

Healthcare procurement professionals earned an average $US148,360. Also faring well were those in fuel and utilities ($US136,578) and telecommunications ($US138,863).

The worst paid were those in manufacturing ($US117,636), metals ($US120,255) and electronics ($US121,316).

Hot demand Down Under

Thanks partly to billions of dollars of infrastructure projects, including massive rail network expansions in Melbourne, Australia can’t get enough of the right procurement people.

“It’s been a really hot market this year,” says The Source’s Tony Megally. “The Australian economy is growing generally so it’s really tight finding the right people across all industries.”

On the services side, candidates with deep knowledge of the telco and I.T. sectors are also in huge demand, especially at mid-to-senior levels such as sourcing or category manager.

Megally says more mid-tier corporates are investing in procurement functions, often the result of bringing in management consultants to review the supply chain.

“Traditionally, they have not had a centralised procurement function and bring on a leader to create the pathways and processes on how to better spend their money on goods and services.”

At the periphery, talent supply has been constrained by the Australian government’s crackdown on 457 visas – temporary working permits for foreigners – with procurement removed from the list of eligible professions.

Irish eyes are also smiling

Irish-based recruitment firm Morgan McKinley says supply chain management has become one of Ireland’s fastest growing sectors, partly because the country will remain a member of the European Union. This means that many companies prefer Ireland over the UK for their procurement activities and shared service functions.

That is being reflected in remuneration, with average salaries increasing by 3-5 per cent year on year.

Employees in highly skilled senior roles are enjoying salary packages that are 15-20 per cent higher.

“Those planning to secure a new career opportunity can expect an increase of between 8-12 per cent. With an increase in opportunities and a continuing skills shortage, we expect this trend to continue next year,” the firm says.

“We equally expect there to be an increase in the number of supply chain professionals choosing Ireland as their desired work location in the coming years, therefore increasing the talent on offer and potentially suppressing continued salary growth.”

More than money?

Most professionals would likely volunteer that job satisfaction factors outweigh the amount that lands in their bank account every month.

But don’t be fooled: money is important.

The US ISM survey asked respondents to rank 14 factors when considering a job. The result? Eighty-five per cent cited the hip pocket, followed by job satisfaction (81 per cent).

An improved work-life balance (80 per cent), pension plans (78 per cent) and medical and dental benefits (79 per cent) also ranked highly.

Respondents were less enamored with health and wellness schemes, with only 60 per cent considering morning calisthenics or a free gym an influential factor.

Only 58 per cent considered sustainability or social responsibility programs to be important, while 58 per cent were attracted by mentorship programs.

Also ranking lowly were childcare and elder care benefits. Given the ageing population, we might expect the latter to become a more elevated consideration in coming years.

Education counts

For procurement professionals, the embossed paper on the wall does count when it comes to salary and – presumably – job satisfaction.

The ISM survey shows the average industry salary for a high-school graduate is $US83,283 – above that overall for those starting out ($US77,996).

For those with a bachelor’s degree, the stipend increases to $US106,909 and then to $US137,670 for a master’s. For doctorate holders – only 2 per cent of procurement professionals have them – the average salary rises further to $US175,827.

Industry-specific qualifications are even more crucial: practitioners holding one or more ISM certifications earned an average 12.8 per cent more than those without: $US123,041 versus $US109,087.

Holders of the Certified Professional in Supply Management qualification boosted pay by 14 per cent to $US125,158, relative to peers without the paperwork.

Similarly, holders of a Certified Professional in Supplier Diversity pulled in $US124,337 – 14 per cent more.

In the UK, CIPS members (MCIPS) earned an average 16 per cent more, with the disparity increasing according to seniority. Senior buyers who are MCIPS earn an eye watering 23 per cent more than non-MCIPS.

“But we must not rest on our laurels,” says CIPS CEO Gerry Walsh. “Continuing professional development should be high on everyone’s agenda to always improve and find the right level of achievement.

“So, I hope this year our professionals will read more and do more to up their game and increase their usefulness so boards and CEOs sit up and take notice of how fundamental good procurement is for their business.” 

Soft skills give a hard edge

The UK survey shows that employers highly value so-called ‘soft’ skills such as effective communication, active listening, empathy and emotional intelligence.

It’s instructive that 67 per cent of total respondents said they had never received formal training in these skills, while less than one quarter (23 per cent) thought that academic institutions instilled the right skills.

The Source’s Megally says, traditionally, procurement has been perceived as a technical function, “but soft skills are front of mind.”

“Rather than talking about processes, it’s about building relationships and being a sales person, really,” he says.

“You can train someone in the technical elements, but those with a strong emotional intelligence are able to connect.”

TYGES Elite’s Malik says: “Soft skills have absolutely become just as important, if not more important, than merely technical skills when it comes to landing A players in the procurement world.

“Employers assume that the technical know-how will be there and they can assess that in their interviewing process. But they are just as concerned on the EQ side as well. They want candidates who understand stakeholder engagement and can build relationships both internally and externally.”

Meeting the industry’s challenges

As with any profession, procurement professionals must take the initiative in enhancing their worth to an organization. To borrow from John F Kennedy, ask not what your company can do for you, but what you can do for the company.

CIPS Congress chair Nikki Bell says the solution lies with individuals taking an active approach to learning and development, with an emphasis on the soft skills such as communication.

“As senior professionals and employers, we should not only be using our honed influencing and negotiating skills to address the matter directly within our hiring, reward and recognition policies,” she says.

“We should also be looking at what we can do individually and collectively to actively encourage, enable, mentor or support diversity in all its forms within our procurement communities, from entry level through to senior and executive leadership positions.”

She adds the profession must also seize the opportunity to ensure ethical and fair work practices across all supply chains.

A key message from the surveys is that the biggest pay rises are being awarded to those who can rebrand themselves as ‘analysts’: think of big data specialists, predictive analytics, e-procurement, artificial intelligence and machine learning.

As in so many walks of life, presentation is paramount in procurement.

Food Allergy Deaths Avoidable With Blockchain

The recent cases of tragic deaths caused by food allergies has opened afresh the debate on fully transparent supply chains.

Many of you will have seen or read news reports in the past couple of weeks regarding the tragic deaths of two women due to severe allergic reactions to eating pre-prepared food. In both cases, the food in question was purchased from the same retailer, though the resulting actions from the cases have been markedly different.

The cases have highlighted industry-wide issues regarding food packaging and labelling relating to allergens, as well as reigniting the debate on where the responsibility lies for food content and allergen checks within the supply chain.

Inadequate Labelling and Mis-sold Products

The first incident occurred after a woman ate a pre-prepared baguette that had sesame baked into the product, but had not been listed on the product’s ingredient list on its packaging.

A recent inquest found that the retailer had “inadequately labelled” its products, failing to highlight the presence of sesame in the food. While the organisation agreed with the coroner’s verdict, it has thrown a spotlight on industry packaging requirements, particularly when it comes to listing potential allergens.

The second death was as a result of a severe allergic reaction to the presence of dairy protein in a pre-packaged sandwich. However, unlike in the first case, the retailer has pointed the finger of blame squarely at one of its second-tier suppliers, claiming it was mis-sold a guaranteed dairy-free yoghurt.

The supplier in question, with whom the retailer has since ended its relationship, has rejected the claim that its product was to blame. They had their own supply chain issue in February 2018 when they were forced to recall some of its products due to undeclared milk, resulting in it ending a relationship with a third-party supplier. The supplier has denied that the recalled product is the same product as caused the allergic reaction, though the retailer and two independent authorities have conducted tests showing that the yoghurt in question had levels of contamination.

Where the fault lies for the contamination will be established in due course. And though this ultimately pales in comparison to the tragic loss of life, it does raise a couple of serious questions: Where does responsibility lie for ensuring product quality in the supply chain? And what can organisations AND suppliers do to ensure full supply chain transparency?

Introducing Blockchain to the Food Industry

The debate on the first question will continue to rumble on. In reality, the responsibility lies with every party, irrespective of which tier they are in the supply chain. That said, the buck ultimately stops with the end user, retailer or seller to ensure products are fully labelled and they are satisfied they are selling a quality (and safe) product.

The answer to the second question may be closer than you think, however. Blockchain has been discussed at length on Procurious and its applications in the supply chain are well documented.

Plus it helps that the world’s largest retailer, Walmart, has just unveiled its new food industry blockchain ambitions in China. The retailer plans to use the existing, proven, technology to ‘overlay’ the supply chains in the notoriously complex industry.

And with major producers such as Dole, Nestle and Unilever on board, as well as IBM as a technology development partner, this does have the signs of being the first step on a (long) road to success.

Success that could usher in new processes for how food information is obtained, stored and shared, allowing all parties to track the provenance of food from farm to table. This will give all levels of the supply chain the transparency required to know products are both safe and of the highest quality.

With what has been in the new recently, with impacts that none of us can predict and that potentially extend further than any of us know, this may also represent the first step to ensuring the similar tragedies don’t happen again.

Read more on Walmart’s food industry blockchain ambitions here.

Big Procurement Questions Deserve Big Answers

We know that procurement professionals like to get the latest intel on the hottest topics from the best in the business – so we’ve sorted you right out.  Your big procurement questions: answered. 

Elizaveta Galitckaia / Shutterstock

What are the surefire ways to speed up procurement processes?

Can procurement ever completely eliminate maverick spend?

Why shouldn’t procurement simply squeeze their suppliers for every dollar they’ve got?

What technology will be the most game-changing for procurement?

What’s the best question to ask a candidate during a job interview?

Procurement questions as big as these require big answers from  people who know their stuff.  Happily, we gathered 50 of procurement’s top influencers and thought leaders in Chicago last month for Big Ideas Summit 2018 and managed to steal a few quiet minutes to put some of them to the test.

Pat McCarthy,  SVP & GM – SAP Ariba

Pat on eliminating maverick spend…

“Procurement can [eliminate maverick spend] but it has to make the purchasing process a destination people want to come to”

Pat on supplier relationships…

“You have to have a great relationship with your suppliers, one where they benefit and you benefit so that making a profit and you fining value in their solutions is the right balance.”

Pat on his favourite job interview question…

“I love to ask candidates about the last book they read because I’m most interested in curiosity – are they curious, what are they curious about – it tells me a lot about them.”

Read more from Pat McCarthy in his blog Procurement with Purpose – Not All Rainbows and Fairytales. 

Doug Leeby, CEO – Beeline

Doug on eliminating maverick spend…

“I think there are certain people, especially executives, who are special and they will always go around the system. If you had the power to say only those that are in the system will be paid then perhaps you [could eliminate maverick spend] but i’ve never seen a situation that had 100  per cent compliance.”

Doug on  his favourite job interview question…

“My go to question is – what are two or three things that you’re really really bad at?  What I’m looking for is A) what they’re really bad  at but more importantly the degree of introspection they have. If they’ve been honest with themselves and done a real inventory of what their areas of development are, what are their weaknesses then they’re somebody I can trust and work with.  If I hear somebody say that they don’t have any then they’re not going to be a good fit for us”

Read more from Doug Leeby in this blog The Rise of the Contingent Workforce… And How to Manage It. 

Daniel Perry, Global Alliances Director – EcoVadis

Daniel on eliminating maverick spend…  

“I don’t think procurement can necessarily eliminate all maverick spend, buyers find ways around any rules that you might put in place.  But if you can provide a very strong vision and mission for procurement and the company in general as to why you are trying to avoid maverick spend, if you can align it to your company’s  sustainability mission or the fact that you want to try and avoid using suppliers that use modern slavery then it gives the buyer another cause for pause before going off and doing maverick spend.”

Daniel on game-changing technologies… 

“Transparency is really changing the way that business is being done these days –  there is much a higher expectation for businesses and their supply chains, who they work with and who they’re associated with so I think the technology around due diligence, around assurance, around using companies that are reputable is going to be a big game changer in the way that companies decide which suppliers to use.”

Read more from Daniel Perry in this blog, Making Sustainable Procurement Work. 

Check out all of our exclusive video content from Big Ideas Summit Chicago via the Digital Delegates group on Procurious.