Simon Whatson, Vice President of Efficio Consulting, explains why teams must arm themselves with as much knowledge and skills as possible.
Procurement has become something of a conundrum over the past 18 months. Amidst organisations’ pre-existing transformation efforts to capitalise on globalisation and digitisation, the world suddenly became a lot smaller. For businesses in the UK, in particular, the one-two punch of COVID-19 and Brexit has put them on the back foot, forcing a reassessment of their supply chain structures. For many businesses, to aid both recovery and the reimagining of previous strategies, the focus will be on technology. But, despite the undoubted influence that digital solutions can have on streamlining, efficiencies, management, and transformation; aren’t businesses forgetting something? Or more aptly, someone?
Even before the pandemic, technology was a foremost consideration for all functions, and procurement was certainly no different. That trend is perhaps even more pronounced now, as organisations look to technology to help mitigate such unprecedented times. But this is a dangerous precedent. People have always been the strongest link in procurement functions and the supply chain, and that hasn’t changed just because the market around us has done so.
While technology can prepare procurement functions for whatever new future awaits, it will fail to meet the desired objectives unless it has a strong team of people overseeing its implementation. Businesses will also need the right set of skills to keep up with the technology and a new way of working post-implementation.
The challenge is industry-wide, not company-specific
This isn’t to say that the leaning towards digital intervention is wrong. It’s an indictment that while levels of innovation are evolving at pace, companies are leaving their people behind. This one-track mind has led to a scenario where 35% of senior industry professionals believe that new procurement technologies are not supported by the right processes and skills. Essentially, it doesn’t matter how good the solutions are if nobody is equipped to leverage their full capabilities.
In fact, the opposite effect can be created – a more disillusioned team feeling usurped by technologies they don’t feel able to use, making the initial expenditure a redundant investment at an already strained time. However, it’s not as simple as going out and hiring people already up to the task, either. In such a fast-moving and dynamic procurement landscape, it’s the industry as a whole that’s fallen behind. The digital skills gap is sector-wide, not company-specific.
This primary hindrance for procurement as a whole function is epitomised by 29% of procurement leaders confessing that access to the right skills was their number one challenge. Additionally, 15% think that a lack of adequate talent prevents procurement from realising the power of smart machines and other technologies.For procurement, the ‘skills gap’ isn’t a standalone concern affecting digital transformations – it’s a gap actually born out of digital’s rapid influence.
These missing skills relative to new digital solutions may well be the difference between transforming procurement and stopping it in its tracks. To be agile, fast-responding, data-driven, insightful, and accurate at this time is critical – and technology can be the ultimate facilitator of these traits. Therefore, by not investing in a skill base that can properly leverage technology, it will be these same assets that organisations ultimately miss out on.
But where to turn, if the issue is systemic and industry-wide? Inside, of course! CPOs and procurement leaders need to educate both themselves and their teams on how these technologies work and can ultimately flourish, bespoke to their unique organisational goals. This education needs to be initiated at the most basic level. Nobody understands your organisation better than you and the staff around you. It, therefore, stands to reason that only investing in the tech, or only investing in outside hires, will create even more of a gap between human and machine.
By identifying internal expectations, upskilling and training existing staff, and then investing in solutions that are entirely appropriate for a newly prepared workforce, tech can hit the ground running, rather than run off without you.
Resilient, now and in the future
It has become something of a cliché to say that culture needs to come first when it comes to digital transformation, but it stands true. By laying out a roadmap based on existing capabilities, you can then develop existing skills to reach a new desired level and then invest in solutions that can be optimised for specific, understood goals. The resulting culture will then already be embedded and thriving when new people do enter the fray.
It’s not a case of “out with the old and in with the new”, for either tech or people. Rather, the current climate should be seen as a perfect opportunity to learn and grow together. When the future remains as uncertain as it is right now, this collaborative, mutual approach is vital. Teams must arm themselves with as much knowledge and skills as possible – not just to counter the current procurement challenge, but to become a more resilient and flexible operation in the face of future challenges.
Simon Whatson is the author of PROFIT FROM PROCUREMENT: How to Add 30% to Your Bottom Line by Breaking Down Silos with Efficio colleagues Alex Klein and Jose Oliveira, published in 2021 by Wiley.