Skills for the Modern Procurement Pro -Detail

Over the past month and a half, we’ve featured a series entitled, “Skills for the Modern Procurement Pro,” wherein we’ve defined 14 core procurement skills and discussed their importance to one’s department and career. We’ve also shared with you how CPOs graded their departments’ performance, and how procurement pros can improve their skills. We’ve received great feedback from Ardent Partners’ community over the past few weeks, so we thought we’d give you a high-level, two-part summary of the skills in the series. Today’s summary will feature the first seven procurement skills.

Data Analysis involves making sense of the high volume of data that is captured by systems across the source-to-settle process, including complex categories, supplier information, and relevant third-party data regarding supply, suppliers, and markets. When “Big Data for Procurement” is properly analyzed, it can yield actionable business intelligence by identifying trends and correlations that cannot be found with traditional data analysis tools and methods. For procurement professionals, the ability to analyze spend and other procurement data – in effect, to connect the dots – is critical for organizational success and ultimately career advancement. Unfortunately, CPOs today believe their staffs are just average when it comes to analyzing data. However, these skills can be learned fairly easily – either on the job or as part of sponsored training or professional development programs, which are everywhere. If you or your staff are lacking in this department, spend the money and get trained up – it’s worth it.

Financial Analysis, beyond an ability to analyze company financials, is an ability to understand and work with numbers. Doing the math, knowing your numbers, and making your decisions based on hard financial data will prevent you from making rash business decisions and help you make smart decisions for you and your company. Strong financial skills can be a great career differentiator; companies are always looking for smart people to crunch numbers and then tell the decision makers what it all means. Like data analysis, CPOs rate their teams as average when it comes to financial analysis. Fortunately, there are a number of self-guided ways to hone financial analytic skills – including Excel tutorials, YouTube videos, and professional development courses, the costs of which can usually be reimbursed.

The Sourcing Process, which Ardent traditionally calls “strategic sourcing”, is the process of identifying, evaluating, negotiating, and implementing the optimal mix of goods and services that best support the enterprise’s objectives. Sourcing is generally viewed as the strategic part of procurement since it’s the primary mechanism used by procurement departments to deliver savings. The ability to assess, identify, prioritize, and then execute the right opportunities is equally important to you and your procurement team. Fortunately, CPOs rated their teams as better than average when it comes to the sourcing process – one of the highest ranking competencies in our matrix. Remember: sourcing is a blend of “art” and “science”, so mastering it comes from the ability to drive a crisp process and inject it with nuance. There are numerous courses and dozens of books and online resources for you to research and study the process, but there is no substitute for sourcing experience.

Supply Market Knowledge concerns a purchasing or sourcing team’s category management, and having a holistic view of commodity prices, supplier financial standing, and supply/supplier risk. It allows you to mitigate legal, reputational, and supply risk, and to ensure that your company is getting the best possible price for the commodity or service out there. Being a “true expert” on specific supply markets (of specific categories) can advance your career and keep you relevant. And if the expertise is relatively scarce, it can enable you to charge a premium. Unfortunately, CPOs rated their teams as only slightly better than average when it comes to supplier market knowledge. Fortunately, though, the wide availability of information available on the commercial internet has made it easy for procurement professionals to develop a basic level of supply market knowledge, much less ensure that suppliers aren’t in the headlines for any dubious, unethical, or illegal activity.

Category Management is a business process whereby someone or some team in procurement manages an entire category of large, strategic spend that requires dedicated time and a level of expertise or specialization. Category management ensures that the proper sourcing strategies are used to identify the suppliers that offer the highest value in each case. Taking on increasingly larger and more complex spend categories, managing effective supplier relationships, and ensuring high supplier quality and value deepens your value to your team and broadens your expertise across the procurement spectrum, which you should leverage into greater opportunity. But according to CPOs, many procurement teams are just average when it comes to category management. Since no sourcing team can have expertise in every category of enterprise spend, they should increasingly seek out their business counterparts to help them understand the key aspects of certain categories and develop category strategies.

Cash Management gives companies an accurate picture of their short-term liabilities, get reimbursed by their clients in a timely manner, and track who pays early. Beyond payment term policies and negotiation, procurement has many other tools in its cash management drawer, including demand management, compliance and post-payment audits, and the more obvious, savings and departmental efficiency. The reality is that procurement professionals who have broader skill sets will advance farther and faster so understanding how cash flows through a business and what strategies impact it is a valuable skill. However, CPOs believe their teams have below average cash management skills, but it must become a core competency for all finance and procurement teams. Procurement professionals can work to develop an understanding of the impact of different procurement-driven strategies that have a real cash flow impact, including understanding the impact of these strategies on cash positions, on budgets, and on the general ledger.

Contract Management consists of specific steps that address the development, approval, and execution of contracts, and lays the foundation for successful supplier relationship management. In the source-to-settle cycle, contract management is a key component in ensuring that the benefits (e.g., lower prices) of a sourcing event are actually realized throughout the life of the contract. Mastering each sub-process in the greater contract management cycle, and demonstrating your value to your team or future team will serve you well in your career. But like many other competencies, procurement teams were rated just average by CPOs, leaving lots of room for improvement. Like most things, practice makes better, especially with something as nuanced as contract management. Professional development courses can help you get foundational contract management skills, but nothing beats putting your time in and learning by doing.

Over the past month and a half, we’ve featured a series entitled, “Skills for the Modern Procurement Pro,” wherein we’ve defined 14 core procurement skills and discussed their importance to one’s department and career. We’ve also shared with you how Chief Procurement Officers graded their departments’ performance, and how procurement pros can improve their skills. We’ve received great feedback from Ardent Partners’ community over the past few weeks, so we thought we’d give you a high-level, two-part summary of the skills in the series. Today’s summary will feature the last seven procurement skills.

Operational Procurement generally means processing purchase orders and managing them with both the supplier and the internal stakeholder whose need is being fulfilled. It’s the engine driving the procurement train. While operational procurement isn’t the most strategic area within a procurement department, it can be its most visible, with direct connections to many enterprise employees (requisitioners and approvers). Operational procurement is important to master early in your career so that you can be promoted out of this area in the future. At the procurement executive level, it is important to understand this process to ensure that process efficiencies and compliance rates are maximized. Despite the fact that CPOs gave it a fairly average score, operational procurement skills were the second-highest rated in this series. One obvious way to improve them is to expand your definition of “operational procurement” to include accounts payable. Mastering “P2P” puts you in better position for the future of transactional procurement than knowing just one of the “Ps”.

Supply Risk Management is the implementation of strategies to manage both every day and exceptional risks of supply based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity. Types of supply risk can include financial, operational, reputation, regulatory, business continuity, and political risk. Supply risk is clearly important to procurement, but the attention procurement teams pay to it tends to ebb and flow with business cycles and really only rise after high-profile disruptions. It behooves aspiring chief procurement officers to understand the importance of effectively managing supplier risk, and then embark on a long and consistent record of doing just that. Unfortunately, CPOs rated their staffs as below average when it comes to managing supply/supplier risk. Staying current on risk mitigation best practices can help you improve, as can volunteering to join or lead a cross-functional team focused on an area of supply risk.

Supplier Performance Management is the process used to track and improve supplier performance by measuring key performance indicators and enabling collaboration with internal stakeholders and suppliers. Best-in-Class organizations are much more likely to have a supplier initiative that is focused on innovation and/or performance improvement. They are also twice as likely to have a standardized supplier performance management process and three times as likely to have visibility into supplier performance and supply risk issues. Mastering supplier performance management is one of many critical steps in advancing up the procurement ranks. CPOs understand how critical it is to have visibility into your suppliers and their performance. Despite this importance, the average staff is below average when it comes to managing supplier performance. If you’re new to the procurement game or have fallen into bad habits, get engaged with your suppliers, stay engaged, and nip any small supplier “brush fires” in the bud before they grow into wildfires.

Leveraging Technology to Drive Business Value means exactly what it says – using technology to drive value. Enterprise technology is meant to drive efficiencies, effectiveness, and visibility making tasks more manageable, and enabling an organization to scale. It can also help us connect the dots to see obscure patterns, arrive at conclusions faster, or confirm what other sources tell us. Since roughly two-thirds of CPOs believe that their procurement departments are short-staffed, using technology to help scale resources, gain greater visibility, and make smarter decisions becomes a critical competency. Like data analysis and financial analysis, leveraging technology to drive business value is a must-have skill set in today’s business environment. Unfortunately, many CPOs feel that their staffs are well below average when it comes to leveraging technology. Fortunately, there are many self-guided ways a procurement professional can get up to speed in the modern business environment, in addition to taking in-person and online classes to get smart on various technology programs.

Business Consulting Skills represent the convergence of people, process, and technology skills. These skills are vital  for procurement pros who are responsible for managing their company’s spend, but rely on the engagement and support of internal clients (e.g., business stakeholders and other functions) in order to succeed. Since procurement often lacks the authority to force an internal client to cooperate, it has to rely on its staff to influence company budget holders and get their buy-in. Finding a well-dressed problem-solver who can influence without authority and knows his or her way around an analytics suite can be harder than you think, and companies pay premiums for this blend of talent. However, CPOs rated their staffs as just below average for this competency. Practice makes better, and that goes for learning how to work with and influence people without authority. Conversely, project management, data analysis, and tech skills can be learned and honed on the job, or by enrolling in professional development courses.

Presentation Skills mean being able to present yourself in a clear, confident, and professional manner to those above, below, and beside you in order to gain influence. Presentation skills boil down to credibility, which will allow you to influence with or without authority, and allow you and your team to navigate inter-departmental collaboration. Successful procurement professionals, like all professionals, understand that one of the keys to success is to clearly, confidently, and effectively communicate their ideas and vision; otherwise, their personal brand looks weak and uninspiring. Unfortunately, modern procurement pros have just a little better than average presentation skills. But much of presenting better is just being better prepared – doing your homework, practicing your delivery, preparing answers to questions, and role-playing situations are great ways to prepare for important discussions or meetings. While public speaking is its own skill, it’s a critical part of developing good presentation skills, and there are professional societies dedicated to helping improve them (e.g., Toastmasters).

Project Management Skills, which the Project Management Institute (PMI) states “is the application of knowledge, skills and techniques to execute projects effectively and efficiently. It’s a strategic competency for organizations, enabling them to tie project results to business goals — and thus, better compete in their markets.” Procurement work (particularly sourcing) is often project based, so procurement departments must utilize their project management skills and processes on a frequent basis. It’s an inherent part of procurement, and can help procurement expand its influence within enterprises. Project management skills are critical to your career, too, as successfully managing procurement projects drives success for your team, adds weight to your resume, and gives you highly-marketable skills. It’s disappointing to see that CPOs gave their teams an only slightly above average score for project management. Luckily, general project management skills can be learned, honed, and mastered by on the job training, shadowing in-house project managers, or by enrolling in professional development courses, the latter of which are often reimbursable.

So there you have it – we hope you’ve enjoyed our “Skills for the Modern Procurement Pro” series. In July and with some distance, I’ll reflect back on the series and present our key takeaways and recommendations for the CPOs and procurement executives whose staffs struggle with these skills

 

 

 

 

 

 

 

It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Business Consulting Skills

What are Business Consulting Skills?                                                                 

At CPO Rising, we often discuss the marriage of people with processes and technologies. Business consulting skills are where all three converge. Let’s begin by looking at people skills, which include: asking smart questions, active listening, developing a sense of the scope and depth of the problem at hand, and helping others solve problems. Solid business consulting skills also include managing expectations with clients, building consensus, and getting results.

They also involve processes – or managing processes via effective project management skills. These include: scoping projects, assigning tasks, setting benchmarks, monitoring progress, analyzing and mitigating risk, and other project management steps.

Procurement professionals also have to be able to analyze supply markets and data, which can mean leveraging process automation tools to analyze and manage spend and suppliers completing the people, processes, and technology trifecta.

Importance to the Procurement Department

Business consulting skills are effective tools for procurement pros who are responsible for managing their company’s spend, but rely on internal clients (e.g., business stakeholders and other functions) in order to succeed.  Since procurement often lacks the authority to force an internal client to cooperate, it has to rely on its staff to influence company budget holders and get their buy-in. For example, procurement professionals work with budget holders on projects to source what they need. Having good consulting skills will:

  • Help them define scope
  • Manage the project
  • Capture requirements and translate them into a clear RFP for suppliers
  • Analyze supply markets, and
  • Provide greater customer service

Collaborating with internal stakeholders, making their lives easier, and providing great customer service while you do it will (1) help ensure project success, and (2) help win repeat customers.

Importance to Career Advancement                                      

Having the full suite of business consulting skills – working well with people, managing projects and processes, and being tech savvy – will get you far in your career. Finding a well-dressed problem-solver who can influence without authority and knows his or her way around an analytics suite can be harder than you think, and companies pay premiums for this blend of talent. As one CPO told me a few years ago, “We have gone out of our way to hire effectiveness. We looked for people with prior consulting experience, good analytical skills, and a strong client focus – people who can manage projects and present well.”

The CPO’s Grade

The “Business Consulting Skills” competency received a C- from CPOs, meaning that their staffs are below average when it comes to using business consulting skills. This is a wasted opportunity for procurement teams, as those with business consulting skills can influence internal clients without real authority over them and better position the procurement team (and company) for success. Whether companies develop the talent they have or recruit better skilled, better-rounded staff, it behooves them to increase their business consulting bench strength.

How to Improve

Knowing that the average procurement department has below average consulting skills (and an appetite for premium talent) should motivate younger procurement professionals to start bulking up on these skills. Depending on one’s comfort level and proclivity, people skills can either be the easiest or the hardest to improve. Collaboration is a major business driver today, as we’re increasingly reliant on others to move the ball down the field reset the chains. But not all of us have it in us to win friends and influence others, at least not immediately. For some, it can be a slow, uncomfortable process. But for others, it can be as easy as picking up the phone and saying, “hey, let’s grab some coffee and compare notes.” Practice makes better, and that goes for learning how to work with and influence people without authority.

Conversely, project management, data analysis, and tech skills can be learned and honed on the job, or by enrolling in professional development courses. As I’ve said before, companies will often sponsor classes or training that directly relates to your position, so be sure to ask about it. There’s even a Grouponfor online project management courses (Note: this is not an endorsement of that class), and I’ve seen similar offerings for other business courses. Of course, if you’re a people person and would rather meet with clients and problem solve, learning tech can be just as uncomfortable. But whether you’re tech savvy or people savvy, you’ll be better off stepping outside your comfort zone and gaining new skills. Comfort zones can be limiting; and while breaking out of them can be uncomfortable, it’s at that very moment where growth occurs.

This year, for the first time, I was invited to present (twice!) at the annual ISM conference in Las Vegas. My presentations are part of the “Emerging Practitioner” track designed to help younger procurement professionals navigate the market and develop a career path. It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Data analysis

What is Data Analysis?                                                                                              

When we talk about data analysis in the context of procurement and sourcing, we’re talking about making sense of the data that is captured by systems across the source-to-settle process, including complex categories, supplier information, and relevant third-party data regarding supply, suppliers, and markets. Analyzing procurement data in this context is something that is far beyond simple analytics and reporting. With automation levels increasing every day, enterprise systems now generate and capture huge volumes of data. Big Data analysis projects seek to tie together large near constant streams of unpredictable data to create actionable intelligence and ultimately value for the enterprise.

Importance to the Procurement Department

We are living in a data driven world and companies today are inundated with constant data streams that need to be managed, analyzed, and actioned in order to be of any value.  Sometimes this data is captured in suites or centralized in a CPO dashboard. But more often than not, this data resides in different IT, geographic, or system-defined silos, and its true value is never fully realized.  When “Big Data for Procurement” is properly analyzed, it can yield actionable business intelligence by identifying trends and correlations that cannot be found with traditional data analysis tools and methods. Being able to analyze and leverage Big Data is what sets Best-in-Class procurement organizations apart from all others.

Importance to Career Advancement

We are living in a data driven world — drivers welcome!

For procurement professionals, the ability to analyze spend and other procurement data – in effect, to connect the dots – is critical for organizational success and ultimately career advancement. Unfortunately, procurement staff with titles like “data analyst” are often tasked with managing data via manual, iterative processes and antiquated technologies that preclude them from analyzing procurement and spend data. As a result, analysts aren’t able to fully realize their value to the company, and it often stunts their professional growth. But when organizations automate processes like procure-to-pay, they facilitate a more strategic environment for all. They allow their staff to move from data management to data analysis, where they can deliver true value for their departments and or customers – a win for all. Being able to say that you “realized x-dollars in savings or y-man hours for my department or client” looks much better on a resume than “managed procurement data for my department and clients.”

The CPO’s Grade

CPOs today believe that their staff is average, a C, when it comes to analyzing data. In aggregate, the CPO Grades for data analysis are neither exceptional nor unsatisfactory and present a picture of a very middle-of-the-road set of skills residing within the typical procurement department. For the typical staffer and department, opportunities for improvement abound.

We clearly see the value that companies, clients, and front-line analysts derive when a procurement department automates the source-to-settle process or deploys reporting and analysis tools to help find and manage the data. Although companies can readily see the value in investing in these solutions, they should not forget that the key to success lies not in being able to see the data but in being able to act on it.

How to Advance Your Skills

Companies need to invest in their people by training and enabling them to be better analysts. It’s not enough to buy the latest and greatest procurement solution. Spend the time and money to train your folks in the underlying analysis skills areas so they can fully leverage the tools with which you provide them. For their part, analysts should seek out professional development opportunities wherever they can. Don’t know Excel or SPSS? Boot camps, classes, and workshops are prevalent, particularly online. Ask your manager and you may be surprised to find that your company will reimburse you for the coursework.

 

his year, for the first time, I was invited to present (twice!) at the annual ISM conference in Las Vegas. My presentations are part of the “Emerging Practitioner” track designed to help younger procurement professionals navigate the market and develop a career path. It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Financial Analysis

What is Financial Analysis?

According to Investopedia, Financial Analysis is “The process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In addition, one key area of financial analysis involves extrapolating the company’s past performance into an estimate of the company’s future performance”

Beyond an ability to analyze company financials, the more simple definition of financial analysis is an ability to understand and work with numbers. Financial analysis is a ‘hard skill set’ and I’m often surprised by the number of executives who simply lack it.

Importance to the Procurement Department

It would be rash, at best, and disastrous, at worst, to make business decisions without first doing your homework and understanding your options. What is the total cost of ownership of a supplier bid? Do you build or buy? Upgrade or replace? Act now or wait? All of these questions can be answered with a fairly straight-forward financial analysis of your options. Procurement pros can’t afford to make decisions based on their guts, the back of tea leaves, or the local soothsayer. Doing the math, knowing your numbers, and making your decisions based on hard financial data will prevent you from making rash business decisions and help you make smart decisions for you and your company.

Importance to Career Advancement

Know your numbers!

I have an MBA in Finance and my early post-MBA career was heavy finance, spent in investment banking and working on capital market transactions. I use the financial skills I developed in school and my career on a daily basis in my role as an industry analyst. They are broadly applicable and transferable to many business areas.

I will say it again. I am sometimes amazed at the number of very smart people I meet who simply fold when trying to open and use a spreadsheet. Strong financial skills can be a great career differentiator. Companies are always looking for smart people to crunch numbers and then tell the decision makers what it all means. As a young pro, these skills can gain you access to executives, particularly those who lack them. As with the rise of “Big Data” in procurement departments, financial data’s true value is only realized when smart people connect the dots and tell the story behind it. But people with great financial acumen are often hard to come by, especially in procurement. This skill gap is one that can be addressed and one that should be addressed- it is an immediate opportunity for those who possess it already.

Because procurement as a profession has only recently caught on among younger generations, procurement departments have had to look for qualified talent in other, more traditional market segments, like business, finance, and even the social sciences. This gives plenty of smart and skilled workers the leverage to gain entry into procurement. For example, Political Science majors may not see procurement as part of their five year plan. But statistical research, data analysis, and communication skills resident within poli-sci majors will give them plenty of options inside and outside of the procurement space.

The CPO’s Grade

Financial analysis competency received an average score, a C, from CPOs rating their staffs, which as we will see is relatively good compared to other areas. In aggregate, the scores shown in the Competency Matrix are neither exceptional nor unsatisfactory and present a picture of a very middle-of-the-road set of skills residing within the typical procurement department. For the average department, opportunities for improvement abound.

How to Advance Your Skills

The sky is literally the limit when it comes to how advanced you can become in this area. With an extraordinary amount of high-quality materials and teaching available, you are your only constraint.

For the financially shy, start today – open up Excel and try to use it every day. Take the embedded tutorials. Search, find, and watch YouTube videos and challenge yourself to understand the numbers. For their part, analysts of all stripes should seek out professional development opportunities wherever they can. While many analysts bring financial data modelling and analysis skills to the procurement table – after all, that’s what makes them so attractive – not everyone’s an Excel master or SPSS guru. Luckily for them, there are numerous training opportunities available – both internal and external – and remember, employers will usually cover the cost (or reimburse you) to get trained up on a program or skillset. Consider this a vital (but also transferable skill) for your professional toolbox.

This year, I was invited to present (twice!) at the annual ISM conference in Las Vegas. My presentations are part of the “Emerging Practitioner” track designed to help younger procurement professionals navigate the market and develop a career path. It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: The Sourcing Process

What is the Sourcing Process?

Leading departments define their sourcing process as one that begins with opportunity identification and carries through contract execution and seeks to standardize their sourcing policies and processes at the enterprise level. Ardent’s traditional definition of “strategic sourcing” is “the process of identifying, evaluating, negotiating, and implementing the optimal mix of goods and services that best support the objectives of the enterprise.” It is important to add two comments:

  1. The terms “strategic sourcing” and “sourcing” are converging to mean basically the same thing. Strategic sourcing in 2013 is not a static methodology that can only be applied to a large multifunctional project; the days of process overkill are behind us. Teams today must learn to take a more nuanced or agile approach to every sourcing opportunity.
  2. To be “strategic,” sourcing in 2013 must use eSourcing (and, where possible, other supply management technology like spend analysis, contract management, and supplier performance management).

Sourcing pros that succeed in the consistent execution of their sourcing projects are the ones that take a holistic approach to the entire sourcing process and leverage their process, project management, consulting, supply market, negotiation, and technology skills across it.

Importance to the Procurement Department

Sourcing is generally viewed as the strategic part of procurement since it is the primary (but far from only) mechanism used by procurement departments to deliver savings. Procurement teams that do a poor job in sourcing are unlikely to do anything else very well. Sourcing success is synonymous with procurement department success.

Once procurement departments begin operating their sourcing programs at a high level, the challenge is to sustain program performance while also expanding its scope. Investments in the tools that automate the process are the primary way to scale the program without significant investment in staff and third-party support. The value of tightly integrated and automated processes cannot be understated. Leveraging spend analysis directly into eSourcing projects that result in automated contracts with suppliers whose performance is then actively measured can help to rapidly broaden the scope of a sourcing program to include more spend and improve operational effectiveness and overall stakeholder engagement while driving significant performance improvement.

Importance to Career Advancement

Whether or not you are on a sourcing team today, if you are working in procurement, understanding sourcing is going to be very important to you. If you aspire to become a Chief Procurement Officer and have little to no sourcing expertise, you need to become one fast or choose a new career path. The ability to be able to analyze spend, make the right plans, and take the right actions – to assess, identify, prioritize, and then execute the right opportunities is critical to the success of a procurement department. Understanding the different categories of spend and the supply markets that feed these categories are also critical to developing the ideal sourcing strategy. To consistently derive full value from spend visibility, sourcing professionals need a blend of three types of analytical capabilities or expertise: (1) data analysis (2) category management (3) supply market expertise. On larger projects, it is also important that you have strong project management, consulting, and client management skills.

The sourcing process is just that – a process – so in order to discuss it relative to one’s career advancement, we must treat it a little differently than other, more tangible skills and abilities. Demonstrating that you worked in a fast-paced sourcing environment where you were responsible for realizing greater savings, contract compliance, spend under management, and or contract renewals with your clients are powerful success stories with which to market yourself.  Document these success stories and remember them when it’s time for your quarterly or annual review; or the next time you find yourself on the job market.

The CPO’s Grade

Chief procurement officers give their staffs an above average score or B- in our Competency Matrix, meaning that respondents to our survey believe that their staff have a pretty good handle on the sourcing process. This was one of the highest rated skills by CPOs. Discouraging because it is only a B-, but promising since this competency area is also one of the most mature processes in the profession.  This likely indicates that when they invest the time and effort, procurement teams can perform well.

How to Advance Your Skills

Sourcing is a blend of “art” and “science” so the mastery of sourcing comes from the ability to drive a crisp process and inject it with nuance. There are numerous courses and dozens of books and online resources for you to research and study the process, but there is no substitute for sourcing experience. Once you gain significant experience running sourcing projects, there are many general truisms and behaviors that you will start to see across many different categories. Experience will help you prepare for and manage them. It goes without saying that I believe that the sourcing leaders in the next decade will be adept in their use of eSourcing to drive their projects. Remember, you cannot spell strategic (as in strategic sourcing) without an e (as in eSourcing).

This year, I was invited to present (twice!) at the annual ISM conference in Las Vegas. My presentations are part of the “Emerging Practitioner” track designed to help younger procurement professionals navigate the market and develop a career path. It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Supplier Market Knowledge

What is Supply Market Knowledge?

The speed of business continues to accelerate and shows no sign of slowing down. Innovation and competition have helped improve operations, products and services, and supply chains, but they’ve also helped increase business volatility and the complexity of trading partner relationships. One major implication of these trends for sourcing and category teams is that the highest-value supplier(s) at the start of a multi-year contract may not be the highest-value supplier(s) in the market at the end of the contract just a few years later. In this environment, it becomes more critical than ever to have current knowledge of key supply markets and a way to access this information when gaps exist.

Generally speaking, SMK concerns a purchasing or sourcing team’s category management, and knowledge of commodity prices, supplier financial standing, and supply/supplier risk. It means taking a holistic view of your sourcing needs and pipeline, and knowing where you and your partners stand at all times.

Importance to the Procurement Department

Having supplier market knowledge of all aspects of your supply chain and sourcing pipeline allows you to mitigate legal, reputational, and supply risk, and to ensure that your company is getting the best possible price for the commodity or service out there.

To give you an example of how important it is to have solid SMK vis-à-vis a global crisis, consider this: a CPO we spoke with recently told us how, the global disruption caused by the 2011 Tōhoku earthquake and tsunami in Japan that wiped out an entire segment of their suppliers. His team was prepared with a list of secondary suppliers of critical sub-components to their products, allowing the company to move quickly to mitigate disruptions to their supply chain. Delays were suffered, but no shutdowns occurred. Without understanding their longer-term inventory needs, supply chain vulnerabilities, and alternative sources vis-à-vis the crisis, the company would have suffered from the widely publicized supply chain disruptions endured by major automobile companies.

Additionally, we see more and more third-party services providing value in this area and a few solution providers are starting to take real-time SMK and embed it within their Spend/Sourcing dashboards. Companies without these solutions – particularly those with anything other than a local supply chain – should strongly consider exploring these options as part of their long term supply/supplier risk management strategy. After all, forewarned is forearmed.

Importance to Career Advancement

There are many supply markets, one aspect of this competency is the ability to analyze a supply market, any supply market. The ability to understand  supply market is critical to the success of driving large global sourcing projects and most direct materials projects. To be honest, most teams invest minimally in this area on the indirect and/or small sourcing project sides. But, the reality is that too many teams use the sourcing process simply to press their incumbent supplier for some predetermined reduction instead of aggressively trying to determine if another supplier can offer better value.

When it gets to specific supply markets (of specific categories), there is nothing like being a “true expert” is something. It can advance your career and keep you relevant and if the expertise is relatively scarce, it can enable you to charge a premium.

Keeping tabs on the state of the market or conditions on the ground is important not just for your company but also for your career. While no one can predict the future, providing indications or early warning of unfolding events on the ground can help those above, below, and beside you manage or mitigate risks. Whether it’s part of your job or not, if you do it enough and your information is good, you develop a reputation for being a trusted source of information that helps keep your company out of hot water. Pretty soon, it’s a marketable bullet point on your resume, your next job, or perhaps even your career.

The CPO’s Grade

The “Supplier Market Knowledge” competency received a slightly higher than average score, a C+, from Chief Procurement Officers, meaning that CPOs believe that their staffs have a decent grasp on their supply market knowledge. Currently, the way SMK is performed in most companies is as a form of CYA (“cover your – – -“), not as a progressive, game-changing tool that can be used to drive wholesale changes across a supply base. With so many sourcing projects failing to identify new suppliers and simply using the same bid panel from the last sourcing project three years ago, supply market knowledge tends to take a back seat to other sourcing tools and processes, like collaboration.

How to Advance Your Skills

Globalization and the birth of the commercial Internet have made the world a lot smaller and a lot more interconnected. Supply Market Knowledge has been bolstered by the Internet where tons of great information is free or at the very least, quite affordable. The wide availability of information has made it easy for procurement professionals to develop a basic level of SMK competency, much less ensure that suppliers aren’t in the headlines for any dubious, unethical, or illegal activity.

One Chief Procurement Officer that I interviewed a few years ago once told me that “high volatility and general uncertainty pervade our supply chain.” His instinct at the time was to avoid locking in long-term pricing and contracts in most supply markets. In another year or so, we will be able to determine if this was the right strategy. Who is thinking about this in your organization and at what level and for what categories? Can you join the group that is doing this if it exists or start it if it does not?

Today, our final answer to the question:

Do you have any advice for more tenured strategic sourcing teams? What should these teams be doing to prepare for the next 5-10 years?

If the focus on savings, efficiency, and cash management during the last recession brought more sourcing leaders to the front lines, globalization will certainly keep them there for the next five to ten years. Globalization presents numerous challenges to sourcing teams and our most recent articles listed below try to address some of them via some recommendations.

Article One recommends that sourcing pros (1) Manage your career aggressively. Start by asking for a raise & (2) Source more, source everything and adopt the eSourcing 2.0 doctrine.

Article Two recommends that sourcing pros “Think Globally, Act Globally” and expand their supply market knowledge.

Article Three recommends (1) expanding scenario analysis and expanding the analytical capabilities (staff and tools) to conduct this analysis (2) developing and expanding logistics expertise and (3) improving supplier on-boarding

Today’s recommendation looks at an extraordinary opportunity that globalization presents for sourcing teams to drive efficiencies and innovation and help their companies expand into new markets. Three factsassumptions facts why this recommendation is important.

Fact 1: The speed of business will not decelerate. Your company’s customers will not wait for you. They don’t need to anymore. If your company delivers its products and services profitably and with a decent margin, other companies are coming for it. Actually, they are coming for your company’s customers. Customer loyalty is under siege.

Fact 2: Product (and service) lifecycles will continue to shrink. Innovation will win. Innovation is not just about function or design; cost, platform, network, access, are also a part of the broader view that is now taken of innovation. Today’s global customers believes that Moore’s Law should apply to everything they buy. Is your company delivering a better AND cheaper version every 18 months? Shouldn’t it?

Fact 3: The buying power of the “Eastern” and “Southern” regions of the world will grow faster than the “West.” The economic shift has begun. There may be ebbs and flows to the shift, but the rise of the “non-Western” world is one of the most significant events in our lives (and in world history too).

Think Globally and Act Globally: Start Developing the Next Generation of Strategic Suppliers

The facts above paint the somewhat grim picture (for those in the “West,” anyway) of a unsettled world where new, lower-cost and/or more innovative competitors forever take market share away from today’s leading companies. Fair enough, that will surely happen; but surely, that has been happening.

What’s the last Sony product you purchased? Sony, meet Korea.

For the past twenty years, Korean-based consumer electronics manufacturers have gained market share. At first, they competed on cost, but pretty soon, they began to compete on quality. For example, Samsung is both the largest seller of flat-screen TVs today and the company with the highest-rated quality.

Most well-established companies eventually falter and cede ground. How many century-old corporations are there? Those in that group may be well-known, but, they represent a very small percentage of all corporations.

Yes, today’s recommendation could be taken as a defensive one. To be fair, “We need Chief Procurement Officers to save the day!” is a common call from these pages. “Defend the bottom line and do the things that procurement does best.” It is absolutely our view that procurement will be a driving force in business this next century. The CPO and procurement in general will continue to rise! But today, our recommendation is meant as one to support a business’ offensive strategy.

For while Japan fights a tough battle against Korea (Sony, meet LGE; Toyota, meet Hyundai), it is also fighting a tough battle against the US (Sony, meet Apple). As the economic balance of power tilts away from the West, huge and untapped markets are developing. Capitalized, experienced companies with superior products and distribution and marketing prowess have great opportunities in those markets. So, while the CFO will continue to need procurement leaders to deliver, Sales and Marketing will need them too. One not so small problem here is that many in Sales and Marketing won’t know they need procurement until it is too late – one needs only look at most product development teams today to see this issue. Ideally, these groups can be engaged to collaborate with their sourcing teams as they identify and develop more strategic supplier relationships. If sales and marketing support is slow in coming, sourcing teams can and should start anyway.

Strategically-located suppliers can and will be a powerful asset in the years ahead. For some categories, this will mean a long campaign to invest in supplier education and regional infrastructure; for other categories, it will mean the development of partnerships with current suppliers to move production to new locations. Entering new markets and developing new products/services can be greatly eased if sourcing teams are already engaged and partnered with (some of) tomorrow’s market leaders.

 

Last week, I participated in a webinar – Strategic Imperatives of Procurement: People, Process & Technology – (you can view it by clicking here – registration required) that was sponsored by Zycus. In our last two articles I’ve been answering the following question that arose during it:

Do you have any advice for more tenured strategic sourcing teams? What should these teams be doing to prepare for the next 5-10 years?

Article One which recommends that sourcing pros (1) Manage your career aggressively. Start by asking for a raise & (2) Source more, source everything and adopt the eSourcing 2.0 doctrine is here.

Article Two which recommends that sourcing pros “Think Globally, Act Globally” and expand their supply market knowledge is here.

Today we will continue our recommendation to

Think Globally, Act Globally (Part Two)

Our view is that the impact of globalization on enterprises is not nearly as dramatic today as it will be in the future. For some enterprises (and sourcing professionals), this is a scary thought or a harsh reality – for others, this is an opportunity to find or create a sustainable advantage. Sourcing teams that are prepared to analyze global markets and identify the best suppliers within them stand to drive extraordinary value and become extraordinarily valuable along the way. The recommendations today, on what sourcing professionals should be doing (if they’re not already) is based on some of our consulting work with large sourcing teams nearly a decade ago and from some more recent work this fall.

(1) Expand scenario analysis and expand the analytical capabilities (staff and tools) to conduct this analysis – With more potential suppliers located in a much wider range of locations, the different cost, currency, and logistics considerations begin to grow exponentially. Sourcing teams need professionals who can identify all of the different considerations and begin to quantify and/or model different scenarios. Additionally, optimization-based sourcing tools like the ones offered by BravoSolution, Iasta, andCombineNet allow sourcing teams to process an extraordinary amount of bid and price information and model different scenarios to determine the optimal award strategy.

(2) Develop and expand logistics expertise – When some of the “first-movers” decided to start sourcing from low-cost countries China, they often focused their savings calculations on a per piece/tonnage/item/etc. advantage over current contract pricing while completely ignoring any impact on increased logistics costs. Two clients of mine in the early 2000s did just that. in the midst of new reports of huge savings from low-cost country sourcing at each company, I met with the logistics directors at each company. Both complained that their budgets had been completely crushed – more than doubling in one case. And this was back when oil was much cheaper. Yes, a total cost of ownership view needs to be taken on all sourcing decisions but, beyond that, a global supply chain requires much more sophistication in the sourcing and management of logistics. [Sidebar: the sourcing of this category also benefits from the use of optimization-based sourcing tools.]

(3) Improve supplier on-boarding – Make it faster and cheaper and ensure that it can scale globally – do this while maintaining its current quality and scope of activities. Globalization makes it more likely that, over time, more new suppliers from new locations will offer great value. As such, teams looking to do business with suppliers in different regions will need to have global capabilities to qualify new/prospective suppliers. And, they will need to do be able to qualify these new suppliers quickly and efficiently. A colleague and I once spent four months (not full-time) working with the supplier qualification team of a Dow Industrial Component in the development of an 80+ step supplier qualification process. [Sidebar: Even though my team was contractually bound to map a specific set of processes to an electronic sourcing / project management tool, we should have been more aggressive in streamlining the process. The tools, the processes themselves, and the process owners were all pretty new, so it was hard to gauge how much of what we mapped was process overkill.] While supplier qualification (or on-boarding) teams are not technically part of the sourcing team (at least not in many cases), the two teams, nonetheless, work hand-in-hand. I am reminded of a large global manufacturer that knows it is greatly exposed to risk because of the single source strategy it has adopted for several key direct materials. One constraint this team feels that it has is the inability of the business to qualify new suppliers in a timely fashion, and so it focuses on other thing. [11/10/11 12:39 pm – Reading this last section with fresh eyes, I did not address the obvious fact that suppliers are also heavily involved in the qualification process. Not mentioning it, is different than ignoring it – there are things that the buying enterprise can do to facilitate the process for new suppliers. More on this soon.]

Think Global – Act Global

Last week, I participated in a webinar (which was really more of a Q&A session than a traditional webinar) that was sponsored by Zycus. This event allowed me to tackle a address a series of “hot topic” questions across the spectrum of people, process, and technology [the archived event is here – registration is required]. One question that really got me thinking was

Do you have any advice for more tenured strategic sourcing teams? What should these teams be doing to prepare for the next 5-10 years?

I had three recommendations. The first two –

  • Recommendation #1: Manage your career aggressively. Start by asking for a raise &
  • Recommendation #2: Source more, source everything. Adopt the eSourcing 2.0 doctrine

are discussed in detail in this earlier article. Here’s the third recommendation –

Recommendation Number Three: Think Globally, Act Globally (Part One)

We often read and talk about the dramatic impact that globalization has had on business, politics, and life, in general, and the huge impact that globalization has had on supply chains and supply risk. The increased importance of procurement within the average enterprise has been caused, in no small part, by globalization. Truth is, we’re just getting warmed up here. The impact of globalization today is like nothing we’ll see ten years from now. Sourcing pros, many of you have been thinking globally, now is the time to start acting globally.

To do this you’ll need to develop and/or access broad market knowledge – There was a time when a category “market” was well-defined and one category manager or category council could possess a deep and penetrating view of a specific market. Those days are fleeting for many categories. The injection mold suppliers based in Michigan and Indiana or Manchester or Marseilles may still be there (although some may be gone), but this is a global category. If you were to google – Injection Molding China – you get 17.1 million results; Injection Molding Vietnam – yields 11.4 million; Injection Molding Africa has 20+ million results.

Many of the innovative production advantages that were held by Western suppliers have shrunk or disappeared as the global market of suppliers has exploded. If what (and who) you are studying in the injection molding market hasn’t changed in the past seven years or you’re still using this industry pub’sGlobal Plastics Sourcebook (that contains a single China-based supplier], you are not current with the market. This may be acceptable for some of your categories, some of the time. In reality, the “bleeding edge” of innovation and pricing may not be too far ahead of where your suppliers are today; of course. the “edge” may present risks. And, of course, not all categories are strategic or significant to an enterprise. At the same time, if you snooze too long, you may lose too much. Sourcing teams cannot afford to mismanage or poorly manage their categories because an erosion in value can very easily cascade across the enterprise’s good and services.

So what do you do and where do you start? Begin with a category assessment and a staff capability assessment to catalog your organization’s capabilities and knowledge and prioritize their management. What’s important? Who on staff can reasonably do what level of analysis? What are the greatest risks in taking no action? What can we access from third parties? (For example, our colleagues over at Metal Miner will soon offer a price benchmarking service that can provide current pricing for different metals in many unique regional markets) Once this initial assessment is done, engage the business leaders and executives and present your findings that includes a set of recommendations. If the stakeholders determine that immediate action is needed, you’ll be off and running. If the stakeholders determine that this is an intermediate-level issue for now, you can still begin attacking it, albeit at a more measured pace.

More on Thinking and Acting Globally next time.

Most Chief Procurement Officers love to invest in their people. So, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Operational Procurement

What is Operational Procurement?

Operational procurement generally means processing purchase orders (“PO”) and managing the order with both the supplier and the internal stakeholder whose need is being fulfilled. It mostly focuses on mean tactical transition work.

In the sourcing process, the supplier is identified and a contract is executed. Operational procurement deals with managing orders after a contract has been set and more broadly how the company procures its goods and services. In an process-compliant environment, a requisition is typically created and, once approved, a procurement staffer converts it to a purchase order for a specific supplier. The PO is sent by procurement to the supplier, who then ships/delivers the goods/services and sends an invoice to their customer’s accounts payable department. The person doing this work in procurement often holds the job title, “buyer.”

Importance to the Procurement Department

Operational procurement is the engine that drives the procurement train. While it is not the most strategic area within a procurement department, it can be its most visible, with direct connections to many enterprise employees (requisitioners and approvers). For its mass exposure alone, this is an important area. Most employees will not be involved in large strategic sourcing projects but they all need office supplies. An employee who has to spend three hours trying to navigate a clunky eProcurement system and catalogs to find some file folders and notebooks will not end the process with a very positive view of procurement operations.

Second, operational procurement is ‘where the rubber hits the road’ – whatever is either saved or spent is theoretical until an order is made or an invoice is paid. Since spend under management is a key performance indicator (KPI) for chief procurement officers (CPOs) and their team, employees that regularly buy outside of procurement policies and systems erode the value delivered from established contractual agreements. Non-compliant spend is costly and without formal purchasing protocols governing a PO, systems to guide users, and an ability to track compliance, the risk of savings leakage looms large.

Tactical sourcing may also fall in this area of a large procurement operation because simply there are times, many times in fact, when there is a need for an item or service that is not currently under contract with a supplier – a new need. Depending on the estimated value of the need (meaning if it is below a certain threshold), a buyer on the operational procurement team may be tasked with sourcing the item or service by taking three bids by phone or online and sending a purchase order to a supplier instead of running a larger sourcing process that results in a formal contract.

Importance to Career Advancement

Operational procurement tends to be staffed by more junior-level staffers and offers more entry-level positions than other areas within procurement. It is an area that is important to master early in your career so that you can be promoted out of this area in the future. At the procurement executive level, it is important to understand this process to ensure that process efficiencies and compliance rates are maximized.

The CPO’s Grade

Operational procurement received a slightly better than average score of a C+, which means that Chief Procurement Officers believe that their staffs are decent when it comes to managing operational procurement. Despite this fairly average score, operational procurement skills were the second-highest rated of the 14 discussed in this research series.

How to Improve

One obvious way to improve upon your operational procurement skills is to expand your definition of “operational procurement” to include accounts payable. As procurement continues to converge with accounts payable, mastering “P2P” puts you in better position for the future of transactional procurement than knowing just one of the “Ps”

 

Leading Chief Procurement Officers love to invest in their people. So, in that vein, we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Contract Management

What is Contract Management?

Serving as the manuscript to business relationships, procurement contracts must be effectively managed to support and protect budgets, including bottom-line savings, as well as track and support the management of supplier performance. Contract Management (CM) consists of specific steps that address the development, approval, and execution of contracts. Ardent Partners identifies the sub-processes in the contract management lifecycle as follows (some of these steps may occur simultaneously or concurrently):

  • Proposal development
  • Creation / authoring
  • Assessment of risk
  • Negotiations
  • Approval / review (including final signatures)
  • Analysis and reporting
  • Auditing

Importance to the Procurement Department

Contract management lays the foundation for successful management of supplier relationships, enabling enterprises to optimize their business relationships. In the source-to-settle cycle, contract management is a key component in ensuring that the benefits (e.g., lower prices) of a sourcing event are actually realized throughout the life of the contract.

Rigorous contract management ensures that the enterprise does not fall victim to savings leakage and non-compliant events on both the sales and procurement sides. In fact, Ardent Partners research has shown that poor contract management considerably hinders savings capture. A lack of visibility into contracts creates numerous scenarios where non-compliance occurs.

Importance to Career Advancement

I often write about the interconnectedness of people, processes, and technologies in procurement and sourcing; all three are critical to success. At the end of the day, people manage the processes and leverage the technologies that help them manage contracts and contractual processes – from proposal development all the way through to the auditing process. Mastering each sub-process in the greater contract management cycle, and demonstrating your value to your team or future team will serve you well in your career. While understanding how to craft, execute and manage contracts is important, the reality is that in many enterprises, contract managers work for the General Counsel, not the CPO.

Nonetheless enterprises are still looking to do more with less, and have expected their employees to wear multiple hats. Thus, taking on a side project or role wherein you’re building a proposal for your company’s next bid, assessing the various associated risks, or reporting on its status from the ground are all ways that the average staffer can add value to their role. As always, remember the added value you bring to your team, company, or client, and make sure others remember, too so you can convert it into a reference, raise, bonus, promotion, or your next job.

The CPO’s Grade

Contract management competency received an average score, or a C, meaning that Chief Procurement Officers believe that their staffs are okay, but not great, when it comes to contract management. But like most things, a C leaves lots of room for improvement, but for many Chief Procurement Officers, contracts are not typically a top priority. Maybe they should be. In any case, procurement leaders would be wise to examine their entire contract management process and look for opportunities to improve upon it.

How to Improve

Here is where the processes and technologies come into play.

Regarding processes, monitoring contract compliance and performance is a key factor in ensuring that savings leakage is minimized. Post-negotiation contract management activities help ensure and control performance, quality, costs, service, terms and conditions compliance. Start by putting executive mandates and incentives in place to control the front-end of the contract lifecycle.

Regarding technology, automation and usage of technology solutions are the catalysts in linking all procurement / sourcing processes into a single union of activity. The ability to peer into supplier performance information (and leverage deep-dive spend analytics / reporting) is a major factor in supporting sourcing decisions. The information extracted from the linkage of processes can help organizations close the gap between negotiations and contract management to help ensure bottom-line growth and drive significant cost savings.

Over the years, Ardent Partners has featured a number of vendors who offer contract management, contract lifecycle management (CLM), and strategic sourcing solutions. Our research shows that many companies would benefit from deploying any one of their solutions, which would help prevent savings leakage, maintain contract compliance, and benefit you and your supplier and customers.

It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Category Management

What is Category Management?

Category management is a business process whereby someone or some team in procurement owns the management of an entire category of spend. Usually these are larger or more strategic categories that require dedicated time and a level of expertise or specialization. For example, at any major automobile manufacturer, you will have teams of buyers focused on one area, like “radios” or “glass” – they manage the current supplier relationship and ensure they continue working with the highest value suppliers. They also track the market to understand trends, changes, and innovation.

Category management blends traditional sourcing approaches with more robust category strategies, more penetrating views of supply markets, and deeper collaborative ties with suppliers. It’s how the next generation of sourcing professionals will keep the business charging forward today while preparing to meet tomorrow’s top challenges.

Importance to the Procurement Department

Category management is a key element to what moves a department’s sourcing from the more tactical to the strategic. Being able to understand the different categories that comprise total enterprise spend and the requirements that the business has in managing them can ensure that the proper sourcing strategies are used to identify the suppliers that offer the highest value in each case. For example, one global pharmaceutical company Chief Procurement Officer that I interviewed was in the process of developing a group of “Commodity Councils” that will standardize category requirements and establish category and sourcing strategies/processes at a global level, where possible. The standardization of requirements and processes should increase the opportunities to reduce the number of current suppliers and gain volume discounts while also ensuring that best practice category knowledge is shared and accessed by all key stakeholders.

Importance to Career Advancement

Like other facets of procurement, owning and successfully managing spend categories adds value to your company as well as your career. Taking on increasingly larger and more complex spend categories, managing effective supplier relationships, and ensuring high supplier quality and value deepens your value to your team and broadens your expertise across the procurement spectrum, which you should leverage into greater opportunity.

There are two aspects of category management worth discussing and discerning. (1) Category managers often develop their expertise as it relates to a specific category or series of categories and are marketable based upon their knowledge and experience in a specific area (2) Much in teh same way that a sourcing process can be applied to direct, indirect, or services categories, the same holds true for category management – the process of managing a category can be applied to a broad range of categories. As you continue to advance,you may have to decide if you are going to specialize in a category or commodity area (IT hardware, services, MRO, etc>) or are you going to be more of a generalist. – it is a very common decision point in many fields – how deep or how broad do I go? There is no right or wrong answer here, but what you decide will shape the types of future opportunities you see and your market value.

Although we don’t advocate job hopping as soon as you acquire a new marketable skill, we do advocate being pragmatic in the New Economy. Your father’s (or grandfather’s) GE is gone. Few people work for the same employer throughout their career and retire with a company pension. Sooner or later, whether you initiate it or not, you’re bound to leave your current employer. That is why in the interim, your relationship is symbiotic – you both give and get, enriching and sustaining each other. When it is time to leave, consider the value you brought to your team and company and leverage that into your next success story.

The CPO’s Grade

The “Category Management” competency received an average grade, a C, from Chief Procurement Officers, meaning that respondents to our survey believe that their staff is competent, but not outstanding. Category management tends to be a focus for more mature procurement departments who have gone through an initial wave or two to understand what they are managing and have developed a series of standardized (and possibly automated) processes to use and engage the business. CPOs who have shifted their focus from “putting more spend under management” to “managing spend well” usually need category managers.

How to Advance Your Skills

Sourcing/procurement/supplier relationship management teams in collaboration with the business stakeholders should develop strategies that define how the different spend categories should be managed to the benefit of the enterprise. The strategies should be based on a series of factors that include:

• How the category is used
• Where and by whom the category is used
• The amount of category spend
• How the category is procured, used, and/or managed
• The category’s level of strategic or operational importance
• Supply market characteristics (type and location of suppliers, etc.)
• Category characteristics (size, on-hand inventory requirements, etc.)
• The type of contract and supplier relationship desired

As the percentage of spend under management and thereby the number of managed categories increases, sourcing teams should increasingly seek out their business counterparts to help them understand the key aspects of certain categories and develop category strategies. Since no sourcing team can have expertise in every category of enterprise spend, collaboration with the business is needed to drive greater value.

It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Cash Management

What is Cash Management?

As the Wu-Tang Clan once proclaimed, “Cash Rules Everything Around Me….. Dollar Dollar Bill Y’all”

While I can’t speak to its relevance to the “rap game,” in a business sense, the Wu-Tang statement above is very true. Cash is the lifeblood of any business operation and understanding net cash positions allows executives to sleep at night. Automated expense management solutions let managers see business expenses in near real-time and ahead of period closing, while also helping finance teams invoice customers for reimbursement in an accurate and timely manner.

If you don’t have visibility into cash flow and the strategies that can be used to impact it, it becomes much more difficult to manage. Thus, an effective cash management strategy tracks many metrics that are driven by P2P including:

  • Implemented savings
  • Payment terms (contracts)
  • Early payment discounts captured – Dollar amount or as a percentage of total opportunity
  • Percentage of suppliers participating in early payment program
  • Days Payable Outstanding

In a nutshell, companies that have their cash management locked down have an accurate picture of their short-term liabilities, get reimbursed by their clients in a timely manner, and track who pays early.

Importance to the Procurement Department

Got my mind on my money and my money on my mind” so says Snoop Dogg… and most corporate treasurers.

While cash management is the responsibility of the treasury department (or the finance department where an official treasury function does not exist), procurement can have a huge impact on cash. Just consider this list of procurement-led strategies that impact cash positions:

  • Demand management
  • Payment terms
  • Compliance
  • Cost reductions or savings
  • Managing projects and investments using a TCO analysis
  • Supply holding costs
  • Process efficiencies

Cash management skills and strategies often extend to the highest ranks in procurement, including Chief Procurement Officers. When the credit markets tightened during the Great Recession, cash management skills and strategies increased in importance to core business operations. In those tough times of 2008 -2010, many procurement executives like Pete Connelly, when he was the CPO, Leggett & Platt andChris Osen, when he was Vice President of Supply Management, MeadWestVaco helped increase working capital on an order of tens of millions of dollars by moving quickly and aggressively to renegotiate (i.e., extend) supplier payment terms and set new policies. Other leaders, like Luca Guzzabocca, when he was the CPO at Banca Monte Dei Paschi Di Siena in Italy, had cash management as a top organizational priority every year.

The establishment and implementation of advanced cash management strategies can be extremely valuable to the financial stability and well-being of the enterprise; they also provide a great reason for procurement and finance to collaborate. Beyond payment term policies and negotiation, procurement has many other tools in its cash management drawer, including demand management, compliance and post-payment audits, and the more obvious, savings and departmental efficiency. It’s our view that cash management should become a core competency for the procurement function.

Importance to Career Advancement

To paraphrase an old rap lyric – “If you’re not making dollars, you’re not making sense” (Note, I could not in good conscience link to that original rap song due to ‘adult’ lyrics – those that click on the link, still get a musical treat – “Close to You” by the Carpenters, arguably the least rap-like song ever sung. Enjoy!)

This statement is true on the business side but it’s also true on the personal side. Good corporate cash management skills can help you end up with more personal cash to manage. Managing cash in a procurement sense does not actually mean counting dollars ans sense but utilizing the strategies bulleted above to improve cash positions. Cash management goes beyond managing your company’s checkbook. It requires practitioners to have visibility into who owns various business processes, as well as inbound and outbound cash flows, payment dates, and discount rates. Clearly, there are a lot of moving parts and stakeholders involved in cash management; but it’s your chance to demonstrate value.

The reality is that procurement professionals who have a broader skill sets will advance farther and faster so understanding how cash flows through a business and what strategies impact it is a valuable skill. To use a series of baseball analogies (it’s spring, right?), playing ball will help you and your team score big in the ninth and up your chances for post-season play. In the meantime, do yourself a favor and remember the home runs you hit or runners you caught stealing (not literally, I hope) – these success stories will come in handy when your contract’s up for renegotiation, you become a free agent, or you’re released.

The CPO’s Grade

Chief Procurement Officers gave their staffs a D+, well below average when it comes to cash management. Since the successful execution of certain cash management strategies requires a level of cohesion and visibility across the source-to-settle process (aided by technology solutions like Spend Analysis, Contract Management, and P2P systems including eProcurement and ePayables) finance and procurement should work together to identify and then plug any gaps in the current supply management (i.e. procurement and accounts payable) processes and systems. For the average department, opportunities for improvement abound.

How to Advance Your Skills

So I start my mission, leave my residence, Thinkin’ how could I get some dead presidents [i.e. money]… Paid in full

Finance and Procurement should collaborate in the development and execution of cash management strategies. If cash is king, then managing it well is “aces.” Cash management must become a core competency for all finance and procurement teams. CPOs seeking inroads with the CFO are wise to pursue this discussion with finance and introduce all of the different strategies that it can execute to improve cash management. Likewise, CFOs seeking greater control of and visibility into cash positions (i.e., all of them) are wise to pursue this discussion with procurement. This dialogue should ultimately build into a collaborative partnership around a flexible cash management program that reflects the changing enterprise, market, and trading partner needs (i.e., as days become richer or poorer days).

Procurement professionals can work to develop an understanding of the impact of different procurement-driven strategies that have a real cash flow impact including those listed above and also understand how the impact of these strategies on cash positions, on budgets, and on the general ledger. By developing this financial acumen, procurement professionals can make a strategic and more visible impact on operations (and on cash, of course) by identifying new opportunities, establishing the right policies, executing the strongest strategies, and utilizing the right mechanisms to track and enforce the activity.

Reprise – “Cash Rules Everything Around Me” (Wyclef & Niia)

It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Managing Supplier Performance

What is Managing Supplier Performance?                                                       

Supplier performance management is the process used to track and ultimately improve supplier performance by measuring key performance indicators (KPIs) and enabling collaboration with internal stakeholders and suppliers.

Supplier performance, like quality, is something that can be quantifiable and highly subjective at the same time. Like quality, the components of performance are highly dependent on the situation, the supplier, and the good or service provided. And, of course, like quality, there are thousands of sources for information on supplier performance and how it should be graded and then incorporated into future supplier negotiations. Sourcing teams can certainly use supplier performance evaluations to make smarter sourcing decisions, but they can also use this process to improve the quality of future supplier contracts (e.g., What SLAs should be included in a contract? What were the most important factors used in evaluating supplier performance and are they reflected in the contract?) and improve supplier communication and relationships (e.g., What did we just learn that we can share during the sourcing process to better define our requirements? How can we build upon what worked in the past and improve upon what did not?).

Importance to the Procurement Department

As I said to an ISM audience back in January, if I have to explain why managing supplier performance is important to a procurement audience, we’re in trouble.  But in general, Best-in-Class enterprises understand that opportunities for growth and value are increasingly found in an enterprise’s supply chain, and that these groups are much more likely to have a supplier initiative that is focused on innovation and/or performance improvement. They are also twice as likely to have a standardized supplier performance management process and three times as likely to have visibility into supplier performance and supply risk issues. The opportunity for those departments with programs in place is to expand the scope of the team to include better engagement, communication, and overall management of strategic suppliers to foster innovation and drive greater value for its internal customers.

Importance to Career Advancement                                      

Like mastering supplier risk management, mastering supplier performance management is just one more critical step in becoming a Chief Procurement Officer. CPOs understand the holistic nature of the business – especially how critical it is to have visibility into your suppliers and their performance. Without visibility, you cannot know whether your suppliers are fulfilling their obligations, and thus, you cannot make the best possible business decision for your company. So get engaged, get the intelligence, and make the smart decisions for your company and your career.

The CPO’s Grade

The supply performance management competency received a C- from Chief Procurement Officers, meaning that their staffs are passable, but not strong, when it comes to managing supplier performance. Many CPOs are aware of their lack of supplier performance management and the supply risk gaps that exist within their operations and are making deliberate strides to close them in an effort to establish better relationships with strategic suppliers, identify and mitigate supply risk, and improve overall supplier performance.

How to Improve

I thought this chart from one of our earlier research studies would be useful here. The chart below identifies CPOs’ Top Strategies to Improve Supplier Performance and Innovation. Our recommendation to procurement pros would be to focus on improving in these areas.

At its core, managing supplier performance means regularly checking in with your suppliers and immediately taking any needed corrective action. So if you’re new to the procurement game or have fallen into bad habits, get engaged with your suppliers, stay engaged, and nip any small supplier “brush fires” grow into huge supplier “firenadoes” (see below).

"Firenadoes" Are Real And Exactly As Terrifying As You Think

It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Presentation Skills

What are Presentation Skills?                                                                                

At the core of presentation skills lies communication skills – being able to effectively communicate with and relate to people of all stripes and under different circumstances. Presentation skills will mean something slightly different to each procurement professional, but in general, it means being clear, confident, and professional to those above, below, and beside you in order to gain influence.

  • For young procurement staffers, it means clearly, confidently, and professionally framing an argument or solution to a manager or client (internal or external) and winning their buy-in.
  • For procurement managers, it means giving clear, precise direction to a young staff, and then turning around and giving a cogent status update to their manager.
  • For CPOs, it means confidently communicating with their team, projecting confidence and offering a clear vision for success. It also means being comfortable delivering crisp executive-level presentations to large and small audiences.

Importance to the Procurement Department

Presentation skills boil down to credibility: those who present well exude credibility, which anyone can pick up on – your team, customers, superiors or direct reports. Credibility will allow you to influence with or without authority, and allow you and your team to navigate the ins and outs of inter-departmental collaboration. This is as true in procurement as it is in other facets of business, and across all industries.

Presentation skills can mean the difference between getting the CPO’s buy-in for a more streamlined Procure-to-Pay (P2P) process and having the CPO scoff at your solution because you didn’t calculate an ROI for investing in an ePayables solution. A skilled presenter does their homework, crafts a compelling message, and clearly and confidently delivers a presentation tailored to his/her audience. A lesser skilled presenter is less prepared, less polished, fumbles on the delivery, and often fails to convert for the win. Don’t be that person.

Importance to Career Advancement                                      

Presentation skills go beyond the procurement department, and can impact every facet of our professional (and personal) lives. Successful procurement professionals, like all professionals, understand that one of the keys to success is to clearly, confidently, and effectively communicate their ideas and vision; otherwise, their personal brand looks weak and uninspiring. Who wants to work with someone who’s weak and uninspiring, or worse, have them on their payroll?

The truth is, being able to present yourself and your ideas is much more valuable than who you actually are and what your ideas are. A fair idea delivered extremely well has a much better chance of acceptance that a really idea that is poorly delivered. Being prepared, confident, precise in your language, and inspiring in your vision may not get you every job or promotion, but it will improve your chances every time.

The CPO’s Grade

The “Presentation Skills” competency received a C+ from CPOs, which means that their staffs are a little better than average when it comes to having and using their presentation skills. There is clearly room for improvement. Better presentation skills will often translate into improved communication with internal and external clients, greater buy in, and ultimately more success in carrying out procurement’s mission.

How to Improve

While this may seem like an inherently personal trait, it has professional implications and procurement pros young and not-so-young should develop them to realize greater success – in and out of the office. A big part of improving presentation is just being better prepared – doing your homework, practicing your delivery, preparing answers to questions, and role-playing situations are great ways to prepare for important discussions or meetings. Not sure how you come off? Tape yourself and review with friends or colleagues. So much of our communication is non-verbal; our body language advertises when we’re confident and prepared, and perhaps even more so when we’re not. So it behooves you to prepare. This alone will often help you feel more confident in your delivery, and help you present better.

Of course, preparation alone can only take you so far particularly if you don’t have a lot of experience in client facing meetings, executive communications, or presentations in front of an audience. For those situations, role playing with a mentor or observing how others present in those situations can be a useful way to practice and improve. While public speaking is its own skill, it is a critical part of developing good presentation skills. The good news is that there are professional societies dedicated to helping improve them (e.g., Toastmasters) and the pursuit is very worthwhile. The more you find yourself in having to make presentations, the better and the more experience you’ll gain. This practice translates into greater comfort and confidence when you have to make your next business case or report an update on your next project or present why you are best-equipped to lead the department’s next big initiative.

It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.

We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).

Today’s Competency: Leveraging Technology to Drive Business Value

What is “Leveraging Technology to Drive Business Value”?                         

At its core, enterprise technology is meant to drive efficiencies, effectiveness, and visibility making tasks more manageable, while enabling an organization to scale. Technology can also help us connect the dots to see patterns that we would have otherwise missed, arrive at conclusions faster, or confirm what other sources tell us. Technology is meant to make our lives easier, faster, sharper, and make us better able to solve complex problems. So when companies or procurement teams fail to leverage technology, they’re missing out on all the time, effort, frustration, and opportunity costs that it could have saved them.

But, technology, in and of itself, does not deliver business value. The supply management software software highway is littered with the roadkill of failed technology initiatives. The goal of deploying technology is the ability to use it (technology) to the benefit of the procurement group and the enterprise, and above all else, drive business value. If procurement teams cannot do that, they are better off trying to get really good at manual processes and avoid the distraction and investment.

Importance to the Procurement Department

Since roughly two-thirds of CPOs believe that their procurement departments are short-staffed, the ability to use technology to help scale resources, gain greater visibility, and make smarter decisions becomes a critical competency. Over the past decade, supply management solutions have become more affordable, more usable, and easier to deploy. The procurement teams that are successful in deploying solutions and driving user adoption see, on average, more compelling returns than other functional teams (i.e., HR, finance, etc.) do from their technology investments. Procurement departments cannot afford to wait for the current generation of less tech-savvy staff to retire before using supply management solutions to drive greater value. Deliberate plans should be set in motion this year to improve this capability.

Failing to leverage technology in the business world is akin to running a 10K road race with three-pound ankle weights on each leg: yes, you can finish the race, but you can forget about breaking world records and personal bests. The added weight is not recommended because it will change your stride pattern and put added stress on other parts of your leg. Why run an important race with a significant handicap if you can avoid it? Why take on any added stress? Since there are so many other races to run (improving skills, placing spend under management, getting executive engagement, etc.), why get bogged down here? [And yes, people put weights on their legs to train and get stronger, but not when it’s time to run the final race. Not using technology does not make you stronger or faster].

Importance to Career Advancement                                      

Like data analysis and financial analysis, leveraging technology to drive business value is a must-have skill set in today’s business environment. Those without tech skills will get left behind (or let go) in favor of tech-savvy business professionals with or without formal training. While younger generations will always have the advantage of greater technology assimilation and adoption, don’t throw up your hands and say, “hey, what are you gonna do?” Work is hard enough. Work smarter, not harder.

I’ve heard many business professionals quip somewhat seriously that they’re so tech illiterate that their young children know how to turn on their tablet or laptop but they themselves don’t know how. While this may draw some empathy and a few laughs at your own expense, it advertises your obsolescence and may hasten your own departure from employment. Do yourself a favor and get up to speed.

The CPO’s Grade

Chief Procurement Officers gave their staffs a D+ for “leveraging technology to drive business value”, which means that, although they’re doing it, they’re pretty poor at it. The challenge of aligning processes to systems is a longstanding procurement problem and a top hurdle to success for approximately one in three procurement teams. This is one of the underlying reasons that the average procurement department has difficulty using solutions to drive business value.

How to Improve

In this day and age, there is a not-unreasonable expectation that staffers train themselves on how to use new technology. In addition to taking in-person and online classes to get smart on various technology programs, there are many self-guided ways a procurement professional can get up to speed in the modern business environment. The providers in our industry have generally focused on making usability a priority in their newer versions, but many solutions still require some type of training. New or aspiring users can find a plethora of free or affordable material on the internet in the form of solution provider blogs, user-threads, or YouTube videos. Ask your specific solution ‘power users,’ or the help desk where online resources (intranet or web) can be found.

Also, if your company is willing, ask them to send you to user conferences where you can connect with other users. Or, if your colleagues use the program or suite at work, shadow them as they use it, tap them for best practices, and consolidate best practices into your own informal user guide. There is strength in numbers, so putting multiple minds together to share and learn best practices will add value to your user experience, your procurement team, and your career.

 

Since poor procurement staff capabilities have been a thorn in the side of many Chief Procurement Officers through the years, we decided to publish an in-depth 16-part series – “Skills for the Modern Procurement Pro” – focused on the specific skills procurement departments (and individuals) should have in place in order to execute well. This included specific procurement areas like transactional procurement and supply risk management, as well as, more general skill areas like financial analysis and presentation skills. This series was built upon our ongoing and long-standing market research focused on procurement operations (strategies, processes, technologies, people, etc.) that is designed to both capture what is happening the market today and identify/develop the strategies and approaches that the industry can use to improve and accelerate results tomorrow and the next day and the next year, etc.

By completing the series, we effectively developed a robust “procurement competency matrix” that can be used to help procurement pros, managers, and CPOs understand and communicate what the required capabilities are for the roles and activities that exist in the procurement department and plan proactively. It’s important to note that while this list is indicative of the skills needed by a typical procurement department today, it was not designed with a specific job role in mind, and while it covers most of the bases, it was not intended to be an all-inclusive list of procurement competencies.

Nonetheless, we think it’s a highly valuable resource:

  • For staffers, the list of skills (and our analysis) in the series can be used to perform an individual gap analysis to determine the relative strengths and/or holes that exist in a person’s skill sets. Staffers can also analyze which skills are more valuable to certain organizations or CPOs and plan their career development strategies accordingly. Each article in the series also provided direct recommendations/suggestions for pros to improve a specific skill and advance their careers.
  • For managers, the series can help them identify, develop, and deploy the people with the right skills into the most suitable positions and help them think more broadly about resource allocation and training needs and budgets.
  • For Chief Procurement Officers, the series can be used to help examine their teams and assess where current gaps exist between the needs of the department and enterprise and skills currently in place.

The series also presented the aggregate procurement department competency grades as scored by more than 250 CPOs and procurement executives. In total, the scores shown in the series were neither exceptional nor unsatisfactory and present a picture of a very middle-of-the-road set of skills residing within the typical procurement department. For the average procurement department, opportunities for improvement abound and, as such, we hope you take advantage of our Skills for the Modern Procurement Pro series to help jump-start your team, department, or individual career.

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