By Eric Walsworth, Director of Supply Management at LexisNexis, a Reed Elsevier company
By now many companies understand procurement’s value can extend beyond tactical buying and into strategic cost and risk management; however approaches for managing talent capable of delivering on that strategic potential has not kept pace. When talent management is addressed, the focus tends to be on changes an individual should make (e.g. behavior/professional skills). There is a better way to transform procurement into a talent incubator: shift from making procurement from the place to be from to the place to get ahead. This strategy inevitably requires investing in advanced supply management tools to enable procurement professionals to be effective and efficient.
A Unique Opportunity
Strategic procurement organizations have unique opportunities to offer employees who demonstrate business leadership potential. Below are two key examples:
The work scope often transcends functional and regional boundaries, enabling employees to better understand the business across its suppliers, operations, and finance silos-ultimately making the individual a valuable source for best practices.
Global procurement departments influence large concentrated spend categories, putting individuals in close contact with senior-level business stakeholders and enabling them to build influential relationships through which they can be change agents.
However, these opportunities cannot be realized unless procurement provides valuable insights and deliver results that the business cannot easily obtain in other ways. If you can attract top talent, the value is often short lived without robust tools that provide access to internal and external supply market information in hand with core e-procurement capabilities. The talent will either stall in place or leave, often because your competition has wisely decided to invest in the resources needed to be successful.
Imagine for a moment trying to convince an all-star athlete to join your professional sports team. When the athlete asks for scouting reports on your team and competition, along with the required equipment to play, you tell that all-star to "Google™" the other teams and talk to dozens of individuals across the organization, many of whom you don't know how to contact. Upon seeing the tools you do have, the athlete realizes better systems were available at his university. This is not unlike trying to attract someone with the ideal balance of strategic thinking, analytical category expertise and collaborative leadership skills using procurement tools that can’t provide timely and accurate spend and information to manage supply relationships.
The situation is further exacerbated with the increased rate of baby boomers retiring, Gen X’ers moving into management roles and Millennials entering the work force. The new generation of supply management professionals grew up with the Internet. They not only expect, but demand access to sophisticated technology tools and market intelligence, especially given the rise of productivity objectives per headcount. Investment in the right people and tools that will attract and retain new talent has never been more important and must be seen as a critical "to do" for procurement leaders going forward. Tomorrow's chief procurement officers want targeted market intelligence to help monitor and research suppliers, as well as manage risk and identify opportunities.
The Way Forward
The good news is that a new generation of tools is in the market to help supply management professionals mitigate risks to their supply chains. Failure to familiarize your organization with and take advantage of the latest technology and market intelligence may become a risk in itself, creating not only short-term challenges with suppliers but a long-term talent management crises.
It’s safe to say the most often-cited reason for not investing in supply management technology is cost, but in the end, how much is lost not only in traditional savings (e.g., lost employees and opportunities) but also in the multiplier effect top talent can bring to an organization? Back to the sports analogy: Getting the all-star athlete to sign without access to robust technology will be at best difficult, and keeping that person afterward, unlikely. Why should we expect all-star business talent to be different? There are numerous case examples documenting significant ROI with supply management tool investments, but the value goes beyond traditional unit price or staffing savings. Repositioning your organization as the place for top talent to get ahead should be a critical part of the technology investment discussion.
Learn how you can leverage market intelligence to better manage supply chain risk with this complimentary white paper from LexisNexis.