Prepare to adapt for future success

Procurement, and business in general, never stands still. Because technology, culture and values continually evolve at a rapid pace, it’s more important than ever for organisations and their senior people to adapt to change and prepare for what is around the corner.

 

Because of the experience the Chartered Institute of Procurement & Supply (CIPS) has in helping a range of organisations to develop their procurement teams and procurement within their organisation, across different sectors, we are in a strong position to identify the areas businesses should focus on. I’ve chosen three that should immediately be on the agenda of both procurement professionals, and board-level decision-makers in organisations around the UK and globally.

 

‘Preparedness’ is a term that I’m hearing more and more at the moment and it ties into something that is high on most companies’ agendas - being resilient. The key to getting this right is for business leaders and managers to use all the tools at their disposal to identify threats to their business and supply chain – whether that’s cyber-security, political unrest, terror threats or new legislation, and mitigate against those risks and build strong, more robust supply chains. It’s important to be vigilant, proactive as well as reactive.

 

When it comes to the supply chain we’re in an age of transparency, where organisations and individuals within those organisations are culpable for any legislative, or moral, breaches because they’re in full view and open to scrutiny. In practice, this means building great networks, using social media, sourcing data analytics of trends and trying to set up early warning signals of potential threats to your operation.

 

Although it isn’t possible to spot every threat in advance, the businesses that are coping best are the ones that build agility into their structures. That way, when a threat does occur, management can deal with it quickly with minimal disruption.

 

One of the changes we’ve seen in procurement over recent years – and many other areas of business will have seen similar trends – is the automation of many different processes. The result is that it is less important now to focus purely on technical skills for employees as the emphasis is shifting more towards soft skills and emotional intelligence.

 

This view is supported by the most recent Procurement Salary Guide and Insights report, produced by CIPS and Hays, the procurement recruitment specialists. It found a year-on-year increase in the importance of soft skills, which the top five list of skills in demand. This is because the role of procurement professionals has moved away from processes and more towards managing suppliers, dealing with contracts, analysing data and building relationships.

In my experience many organisations have been slow to see the shift towards soft skills, but this is something that is beginning to change, partly driven by employees looking to develop. As automation increases, so does the need for those tactical skills, and there is a risk that companies will find a capability gap where their employees do not have the skills required for a modern procurement team.

Technology is something that all organisations need to invest heavily in. New developments are changing the dynamics of business in almost all sectors, but when it comes to making an investment you need to be sure you’re buying the right technology for your business objectives.

 

The emphasis needs to be on what you want to accomplish, and then to think carefully about whether buying new technology will help you achieve this and provide a sound return on investment.

 

The most important area to focus on is technology that will automate processes that are a non-‘value add’ in the business, which help remove ‘noise’ and allow a business to focus more on strategic activity.

 

An example of this is eProcurement – it’s possible for organisations to create significant efficiencies by utilising the right system so that the valuable time of front line employees is used in a way that benefits the overall operations. This is where you get the most useful returns and where technology is an invaluable part of staying competitive.