Tag Archives: generation procurement

Procurement Needs the Human Factor

Procurement is evolving and developing and leaders have a chance to create a function to meet all an organisation’s future needs. But first they need to remember the importance of the human factor.

human factor
Photo by Min An from Pexels

Procurement leaders now have an unprecedented opportunity to be the architects of a new function that puts customer satisfaction front and centre. This is a function enabled by technology whose value proposition goes beyond mere cost savings, and becomes central to business’ ability to gain a competitive advantage and deliver shareholder value. Delivering this shift will require a complete realignment of the traditional procurement skill-base and a whole new operating model.

Our latest research study, “The Human Factor: Strategic procurement and the leaders of tomorrow”, surveyed 500 senior procurement leaders including CPOs and CFOs worldwide, to explore this new shift in the procurement operating model, as well as the expected skill-base required to prosper in the future world of procurement.

Here are some of the significant findings.

The Operating Model of Tomorrow

We’re seeing a growing acceptance in the industry that things need to change. Procurement leaders are starting to acknowledge that in order to develop and elevate their position, procurement needs to become more relevant to the business and suppliers it connects.

In line with this, our research found 53 per cent of procurement leaders to have revamped their procurement operating models in the last 12 months, rising to 80 per cent in the last three years. 46 per cent listed ‘structure’ as one of the top three aspects they had recently revised.

However, in our view, the new operating model needs to go beyond a change in roles and responsibilities, or a restructured department. It needs to be people centric, with a focus on enabling the optimal interaction between those people and the right mix of technology, insights and expertise.

To get it right, first consider what information the people in the organisation will need, when they will need it, how they will access it and how it will help them serve their customers better.

Significance of Soft Skills

Taking a step away from traditional procurement training, ‘soft skills’ are becoming increasingly important for future procurement leaders. A ruling 78 per cent of our survey deemed them to be either essential or very important to the role, with the ‘ability to influence and lead’ ranking as the number one ‘soft skill’ to possess – reflecting a clear shift in focus for the new operating model.

The study also found ‘Flexibility and agility to manage ongoing change’, ‘Courage to challenge conventional thinking’ and ‘innovation, creativity and problem solving’ to be among the top valued soft skills by respondents. In our view the expectation is clearly for future procurement functions to lead business change, challenge how they’ve operated to date and adopt a more project-based mentality with an agile approach, in order to better meet the needs of the business.

Mind the Digital Skills Gap

As society is growing increasingly tech-savvy, it’s no surprise that digitalising procurement processes and systems topped the priority list of the leaders in the industry. There is an understandable temptation to buy gadgets with the belief that spending money on software will afford a competitive edge.

However, our study revealed over a third of leaders believe that new technologies are not supported by the right processes and skills, a quarter say there is a false expectation of technology in the field, and 15 per cent feel there is a lack of adequate talent which prevents procurement from realising the true power of technology.

In order to benefit from technology, procurement leaders need to understand the impact of that technology on their workforce, the new and different skills that will be required, and then figure out how to bridge the gap. However, it seems that procurement is starting to address this as two thirds of respondents indicated that they have already taken steps to tackle the talent pipeline shortages and skills gaps in their functions.

The Future of Procurement Learning

With the procurement landscape changing so rapidly, adaptation is necessary and key to enabling this is training.

Learning and development opportunities were recognised by the industry leaders surveyed as the top method for retaining talent, so why did 94 per cent fail to have a structured approach to training in place across all levels in the organisation?

Providing such a programme is a vital way to up-skill employees in a cost-effective manner, while also playing an important role in attracting prospective, highly-skilled talent.

However, our research reveals 79 per cent of leaders believe procurement’s approach to training needs to change in this regard, showing there is clearly a gap between what procurement leaders believe is needed, compared to what is actually being implemented.

A structured approach to training ensures the knowledge, skills and competencies developed can support the strategic development of the function and wider organisation beyond it. In our view the best way to deliver this training is to have the recipient in mind, first grasping an understanding of how they will consume the training, to then design and deliver it accordingly.

Generation Z and Beyond

As the younger, more digitally native generation enters the workforce, businesses need to overcome and engage with the different attitudes that Millennials and Generation Z hold. From misconceptions about the value of the procurement function, to misplaced expectations about how technology should work, procurement leaders need to address these preconceived beliefs and position the function in a light that will attract these new workforce demographics.

The study shows a clear divide in what organisations believe to be the best way to attract and engage this young talent. A quarter identified salary and remuneration to be the key factor, 21 per cent believed it to be procurement’s role in sustainability and CSR, and a further 20 per cent ranked additional financial benefits top of the list.

Organisations clearly have an idea of what matters to the next generation of leaders, they just need shout about it more loudly.

The Human Factor – Moving Forward

The future procurement operating model is looking to embody a digitally literate workforce with strategic minds and an abundance of soft skills – a step change in requirements from ever before. Attracting this talent is a challenge, but this is the future of procurement.

Procurement needs to create a culture that enables an inquisitive mindset, but one with the confidence to challenge constructively, both internally and externally. It needs structured training programmes to empower employees to develop real, transferable hard and soft skills, but places heavy emphasis on the importance of self-learning and reinvention in an era when knowledge has never been cheaper.

It’s vital that procurement leaders confront this change challenge head on and in doing so, they will not only realise procurement’s full potential as a value creator for the company, but also to ensure its continued existence as a function.

For too long, procurement has been characterised as the “process policemen” or “final price negotiator” – charges it would like to deny but often lives up to. To become more effective in the future, procurement leaders need to build this new, technology-driven, skills-enabled procurement operating model that really values the human factor.

Download the full “The Human Factor: Strategic procurement and the leaders of tomorrow” report, here.

Efficio is the world’s largest specialist procurement consultancy operating across ten offices in Europe, North America and the Middle East. Efficio works with clients to identify, deliver and sustain improvement opportunities in procurement. Their international team combines unparalleled procurement expertise and industry experience with a unique blend of intellectual capital and technology to deliver results and advance clients’ procurement capability.

Is The Ageing Workforce Blocking Career Progression?

Younger workers are worried that an ageing workforce makes it more difficult for them to get a job – but just how much truth is there behind their concerns? 

By Kaspars Grinvalds / Shutterstock

The speaker of the United States House of Representatives, Nancy Pelosi, now aged 78, was once asked by an NBC reporter whether her decision to stay in the job blocks a new generation of Democratic leaders. Offensive though it is, the question makes sense to a lot of younger workers.  If Pelosi keeps working, a younger person doesn’t get a go at the job. And there are many workplaces where that question is playing on the minds of workers.  But intuitive as it sounds, the evidence says it’s a load of bollocks.

More of us are working to an older age than ever before.  In Australia for example the chance that a 55 to 59 year old is still working has jumped from 60 to 75 per cent since the turn of the century.  The likelihood that a person aged 60 to 64 is still working has similarly leapt from 34 to 57 per cent.  And the story is repeated across the globe.  Eighty three per cent of 60 to 64 year olds in Iceland still work, as do 76% in New Zealand, 68 per cent in Sweden and 66 per cent in Japan. 

This is trend that is likely to continue to accelerate with the United Nations projecting that by 2050 the number of people aged over 60 will more than double, to approximately 2 billion, representing around a fifth of the world’s population.  Better healthcare have contributed to longer average lifespans. This combined with declining real spending power for employees has resulted in strong economic and social imperatives for people to stay at work longer.

Perhaps unsurprisingly, younger workers are worried that the presence of older workers makes it more difficult for them to get a job and to progress if they do get one.  Surveys like the one carried out by Canada Life Insurance group reveal that two in five employees believe the ageing workforce will make it harder for younger employees to get a start. 

Employees under thirty are the most concerned with almost of half in agreement with the proposition that older members of staff should retire so that younger workers could have a genuine chance of promotion.  Just 29 per cent of workers aged over 50, agree.  There’s only so many jobs at any given level, young workers reason, and if people are staying in work longer then their chances of progressing are significantly decreased. Only one in five workers felt that older workers should be retained so that they could benefit from their experience.

And while that logic sounds intuitively correct, there isn’t a shred of evidence to support it.  The “lump of labour” theory, as it is known by economists has been around since 1851, when a British economist argued that cutting the number of hours employees worked would eliminate unemployment.  It has been used in policy debates to justify all manner of sexist, anti-immigrant or ageist employment or retirement legislation.  In essence it maintains that any big ‘lump of labour’ suddenly hitting the workforce, such as from immigrants, women, returning veterans or, in this case, older people, reduces the employment prospects of new entrants.

But when economists went looking for proof that this actually happens, they have consistently come up dry.  One recent example is a major review of US labor statistics covering the period 1977 to 2011.  It found that the increased number of older workers in that period had not reduced employment of younger workers, reduced the wages paid to younger workers or reduced the number of hours of work available for younger workers.  Indeed the data suggested that the greater employment of older people had lead to better outcomes for younger workers in that period.

Global analysis by the US National Bureau of Economic Research says that the macroeconomic reality is very different from what intuition tells us.  From an economy-wide perspective, the presence of older workers means more people working rather than collecting pensions and being otherwise dependent on the productivity of younger workers.  This in turn drives greater and faster economic growth which in turn spurs the creation of more jobs.  The pool of available jobs is not static say economists.  It is a rapidly expanding pool that is driven by economic activity and technological innovation. 

If your plan for career progression begins and ends with waiting for your boss to retire or die in harness, then yes, the ageing workforce is going to be a bit of a problem for you.  But if you are open to lateral movement, reskilling in new technologies and embracing the new opportunities that an expanding economy presents then older workers are no threat to you.  And more than that by the time you get to be part of that cohort, you will probably be very grateful for the healthcare and lifestyle benefits they have forced employers to adopt to support an older workforce.

Communication Queen – Not Your Typical Procurement Pro

There’s a step change coming in the procurement technology and software industry. And communication and relationships will be the central pillars of it, says this Millennial.

There is step-change coming in procurement, and the change is going to be keenly felt in the procurement technology and software industry. But for this change to take effect, it needs support on both sides of the aisle – buyer and supplier.

Simona Pop, Head of Partnerships & Global Communication at InstaSupply, is not your typical procurement professional.

She’s one of a new breed of professionals involved in procurement and supply chain, who believes change is on the horizon, and that it can’t come soon enough.

A tattooed Millennial, with a stake (both monetary and emotional) in the company she works for, Simona presents a refreshing view on buyer and supplier relationship management, and believes in creating emotional connections with clients.

Not only that, but she also walks the walk when it comes to leveraging social media in business.

Procurious caught up with Simona, and chatted to her about her career, her approach to social media, and why she believes we shouldn’t have to leave the real-time efficiencies of our personal lives at the office door.

Tell us a bit about yourself – how did you get to where you are today? 

It has to be said, my career trajectory isn’t what you might call straightforward. I got out of school thinking I was going to be in advertising. Then I moved to the UK and started working with Brakes, the food supplier, in a sales role. I then went 180 from that path and started working in events.

Finally, I started working with InstaSupply as Head of Partnerships and Communication. One thing lead to another really, and in the end, it makes a lot of sense.

I love communication and building relationships. That’s what makes the world go round, as far as I’m concerned. My communications background is ultimately the driving force behind my take on business.

You’ve recently won your place at Virgin Disruptors – congratulations!

Yes, I am very excited about it. It was all about presenting my vision on what industry needs disrupting and how I would do it. I went straight to the core and illustrated how ALL business needs disrupting.

You can see my video below. It’s all about changing procurement and finance. They are the engine of each and every business so they need to be as well oiled as possible.

What role did social media play in the award?

As with every bit of communication I put out there, this was also a social affair. I got to chatting with Virgin via Twitter and found out about this opportunity. As everything in social media moved pretty fast, I only had a couple of days to script and create the video in order to stick to deadlines. I then uploaded it on YouTube and shared it via Twitter again.

I am a true believer in the power of social and its ability to not only bring us information in real time but also challenge us to become more creative and innovative. It’s why I am so happy to be part of the Virgin Disruptors community as a technology company.

So many procurement technology implementations fail – why do you think this is?

It comes down to how people interact with the technology and the company providing that technology. Is there a match there in terms of values? Or is it more about ticking a box and signing a three year contract so you don’t have to worry about it?

So many businesses will go for old technology just because someone else in their industry has used it before. Even if it’s not a great fit for them and their staff, they will implement it anyway just to tick that “tech” box and consider it done.

More often than not, businesses pay the price tag of an Aston Martin, and end up using it like a second hand Ford.

The fact that back office operations, procurement and finance technology involve so many different roles and levels of seniority, makes it paramount that the interface and functionality appeals to all age groups.

There shouldn’t be a difference between the way we interact with brands in our personal lives, and brands that we see at work.

What are the key changes you think need to be made? Can we make procurement/B2B software more like B2C counterparts?

The way I see it, every business relationship is a partnership – it’s not a case of sell and move on. As a tech supplier, you are going to be working closely with your client, as they will interact with your product every single day.

You want to allow them to work smarter, be more efficient and ultimately make their lives easier. You need to provide top notch tech, but also real time support. There’s no place for a helpline that keeps people on hold for hours, or an email they get a response to in three months. That would be unacceptable in B2C nowadays!

There needs to be a shake-up. We need to remove the jargon, the boring pages of bland text, the hieroglyphic appendices, and the contracts that tie you into five years, whether you like it or not.

Software providers want partners, not prisoners. We are here to simplify buyer-supplier relationships, and make life easier for everyone involved in running a business, regardless of role and seniority. Ultimately we want to support them in growing their business, and having a better quality of work.

After all, why should we leave all the efficiencies of B2C, our personal life, at the door, when we get to work?

What Can Procurement Professionals Learn From Young Professionals?

Generational stereotypes are frequently unfair and unkind. From traditionalists to young professionals, there is much to learn from each other.

This article was written by Dee Clarke, Davidson Projects & Operations.

With people living and working longer, the days of two to three generations making up a workforce will soon be a thing of the past. For the first time, we will start seeing workplaces with around five generations working side-by-side.

Loosely, Forbes Magazine defines the five generations that will soon be working together as:

  • The Traditionalists (born prior to 1946);
  • Baby Boomers (1946-1964);
  • Gen X (1965-1980);
  • Gen Y (now referred to as Millennials); and
  • The iGeneration (born after 1997).
Generation Stereotypes

Interestingly, Millennials, Gen. Y, Digital Natives (whatever you want to call the generation born between 1980 and 2004), represent almost a third of the global population today. They will comprise 75 per cent of the global workforce by 2025.

There are plenty of stereotypes about each group. The Baby Boomers who scorn social media, the Gen. X who don’t like authority, the Millennials who are impatient about promotions and getting ahead, and the iGeneration who are attached to their smartphones.

While there are some consistency in these traits, Jeanne Meister, co-author of ‘The 2020 workplace’ says that it is important as managers to move beyond the stereotypes, and get to know each person as an individual.

Mindful of Millennials

This could not be truer than within the procurement sector. As someone who specialises in sourcing talent in this sector, I have lost count of how many conversations I have had of late with clients and candidates regarding the hot topic of age.

And millennials are the hot topic of the moment.

There seems to be a general consensus in the media and public that Millennials are lazy, entitled, self-absorbed and will unlikely stay in any job for long. Personally, I believe there are many great exceptions to this mass generalisation, and hiring managers within procurement need to be mindful of this.

I recently had the pleasure of meeting two young professionals who were exceptions to the rule. I met Sandra Silva at a CIPS networking event. As I’m sure you would know, these events are normally attended by procurement professionals, currently working in the industry, to network and discuss market challenges, and perhaps learn something from a key presenter.

A young Sandra was studying her Masters in Supply Chain Management at Queensland’s Griffith University. She had relocated here from Colombia after completing her engineering degree.

What caught my attention was how committed Sandra was to start her career in procurement, and most importantly how determined she was to take the reins when it came to her career planning and progression. She was leaving nothing to chance.

Sandra attends regular industry networking events. She had sought out an industry mentor and was applying for internships, while continuing her studies. A few months later when I met her, she showed her determination and dedication to her career when she told me she had taken on an internship and a part-time entry level procurement position.

Diversifying Talent

The next example was when a colleague asked me to meet with a young man, James Young, who was seeking career advice in my area.

James simply defied every stereotype millennials face. James came to meet me on his lunch break. He presented well and, although he had already secured a contract position with another firm, he was looking at his long term career and direction.

Before finishing high school, James had completed a couple of short internships. While attending university, he attended networking events and connected with people within many different industries to identify the right one for him. On completion of his degree he applied for graduate programs with the big four consultancies.

Through our meeting he listed his plans, and how he was going to diversify himself so he was a valuable asset to any future employers. Most of all he talked about what he planned to do to consistently upskill and further develop his knowledge.

Learning from Young Professionals

Both Sandra and James showed determination, drive and willingness to go above and beyond the normal approach to secure the right career for them.

I believe this determination will not just stop there but will lead their careers to the top, these were not the actions of ‘lazy’ millennials, but two future CEOs.

So what can we all learn from these two young professionals?

Generally speaking, in the past most people ‘fell’ into procurement, starting with backgrounds in engineering, law or accounting to name a few. They then somehow became involved in projects, or saw the opportunity to add value with cost savings in better buying strategies.

While the industry has become more professional, and there are now specific qualifications and university courses, many have just moved from one role to another, letting opportunities dictate their next career move.

Bringing New Ideas

Just like these two young Millennials, we need, as an industry, to take charge of our career, and continue to develop our skills. We need to expand our networks, and not be afraid to take on an ‘internship’ or mentor, to ensure we not only survive, but thrive the future world of work.

Furthermore, we have to stop letting age stereotypes dictate how we approach work, or manage the growing number of generations we will work with.

FCIPS accredited Alan Robertson, who has more than 20 years procurement experience across private and public sectors, said Millennials will bring new ideas to organisations. And we need to listen.

“Otherwise we won’t take advantage of their skills such as online networking/blogging and asking plenty of questions,” Mr Robertson said.

He also added that “a ‘general’ trait of Millennials is that they like to try new ways of working and improvements, so don’t leave them to get bored. Companies will lose them if they don’t let them be free to use their adventurous spirit.”

Dee Clarke has more than 10 years’ experience in recruitment across the Australian and Irish markets. During this time, Dee has forged a strong expertise in Procurement and Contracts and is an Affiliate Member of CIPSA.

Dee is a Senior Consultant within the Projects & Operations team, which delivers the right technical and project expertise for any stage of a project or asset’s life cycle.

Meet the Procurement Young Gun Making Her Mark Globally

It’s a big deal to be charged with the task of managing a significant spend portfolio that covers the Asia-Pacific region. But this BP strategic sourcing manager takes it all in her stride. Meet Joanna Graham, winner of the 2016 Future Leader in Procurement Award.

Johanna Graham

Graham looks after procurement for the retail networks of one of the world’s largest oil and gas companies. Her role encompasses the entire BP service experience, including building new service stations and travel centres, maintaining them and supplying them with equipment. She manages a team of four people.

It’s no mean feat,  particularly given that she’s played an integral role in a number of significant strategic projects recently undertaken by BP.

Driving Procurement Value

“It’s a really exciting time to be working for BP, especially as there is a growing culture of innovation. There have been real opportunities to create value for the business as BP strengthens its competitiveness. This all creates an environment ripe with opportunity for Procurement to drive value in fresh and creative ways”.

Graham’s manager and BP’s procurement director, David Macdonald says: “Joanna exemplifies everything that’s good about the modern procurement professional. She’s got remarkable commercial acumen, negotiation planning and stakeholder management skills all brought together with a tough-minded determination. From my experience, it’s very rare to see all those attributes in the same person.”

A glowing endorsement for Graham indeed, who spends a lot of her time on sourcing activities and negotiating complex contracts.

Graham was also the procurement lead on a major process to select a joint venture partner and launch a new company to manage operations, engineering and maintenance of BP’s network of 18 fuel terminals dotted across the country. This piece of work subsequently extended to establishing a procurement function for the new company.

Broadening Experience

Prior to BP, Graham worked in procurement roles for British multinational alcoholic beverages company Diageo, owner of brands Johnnie Walker, Smirnoff and Baileys, among many others. These roles took her around the world including to China, broadening her experience significantly as she perfected cross-cultural negotiation techniques. Graham says she learnt about cultural nuances and how they impact upon sourcing, as well as navigating supply chain complexities.

“Living in China was an amazing experience both personally and professionally. I learnt so much in the time I was based there, and was lucky to work on some really exciting projects in a market that was at that time experiencing exponential growth”.

After making three international moves in less than six years, relocating to Melbourne in early 2013 was a lifestyle decision. Graham continued to work for Diageo for a period, though the time difference made working with global colleagues in the UK and US difficult.

“Since settling in Melbourne, I’ve been blown away by the strength of the Melbourne procurement community. They’re a very tight-knit community here, with networking events and Roundtable forums. Procurement professionals here are incredibly supportive, and willing to answer hot topic questions.

“In my experience, there’s just not that same sense of community in the UK due to its size, although I know that given the explosion of growth being experienced by www.procurious.com, that it’s only a matter of time before that changes.”

Strengthening Global Connections

Graham also praised the work done by The Faculty to build the procurement community in the Asia-Pacific region. Next on the agenda for Graham includes strengthening global team connections.

“There’s a lot more that we can do to make the BP team here closer. I want to leverage global team members and manage conversations to bring better value to the Asia-Pacific region. My focus is on being best in class, and I won’t stop until we get there.”

Graham is advocating the use of social network tool Yammer as a valuable way to enable procurement team members from around the world to communicate quickly.

“The intelligence that’s flowing internally through Yammer is absolutely phenomenal. I can post a request for some information for a supplier presentation, and less than 24 hours later a stack of brand collateral on a similar presentation on the other side of the world has been posted for me to access. It’s far more efficient than email.”

The Future Leader of the Year award is sponsored by American Express.