Procurement professionals are typically focused on two things: ensuring the delivery of goods and services, and keeping costs as low as possible. While these responsibilities will certainly not be fading any time soon, there will be a call for these teams to fill other roles within the company. Procurement teams have the opportunity to become strategic, adaptable professionals with a whole new set of skills in their toolbox. These are some of the procurement skills that will be most valuable in the coming years.
1. Holistically Manage Risk
While procurement officers are already heavily involved in predicting, managing, and mitigating risk, the approach to procurement risk management is shifting. Procurement teams now need to view compliance as a more holistic focus, managing total risk exposure, risk mitigation investments, and risk transfer pricing. Risk management needs to expand throughout the organization with governance structures ensuring that every department is completely on board. A company’s agreements will likely need to be reexamined and potentially redrafted to reduce the overall exposure to risk, in addition to ensuring the way these contracts are managed is secure. A procurement officer’s view of risk must become all-inclusive as the business world becomes digitized and faster-moving.
2. Enhance Sustainability
Where procurement was once focused primarily on simply managing cost, procurement officers now need to create sustainable supply chains. Sustainability for supply looks like stable suppliers with consistent, steady business. Continuous use and reuse are important not only for cost savings but for business and economic benefit. The transition from simply consumption to a more circular economy will enhance business relationships between companies, promote growth for the overall corporate entity, and bring a sustainable pattern of procurement that can be carried into the future.
3. Improve Supplier Relationships
An integral part of establishing a sustainable supply chain is improving the relationships a company has with its suppliers. Procurement professionals are already engaged in establishing and maintaining supplier relations, but the extended relationships and trust will become more critical with sustainable procurement. Continuous, good relationships increase the chances of good deals and quality while decreasing supply chain risk.
4. Participate in a Global Market
The digital economy today encourages new and innovative companies to rise up all over the world. An effective procurement officer will not only keep their eyes open for these organizations on a global scale, but will also learn the best method for dealing with international suppliers. Localization and understanding culture and language are critical elements that will help businesses expand on an international level.
5. Involve New Technology
With so many companies transitioning to digital workflows, procurement officials need to have updated technology in order to perform their job effectively. Such technology will include risk management software, contract lifecycle management platforms, spend analytics, report generators, and many others. Being familiar with this technology will streamline the procurement process, improve collaboration between departments and other companies, and result in more efficient and effective procurement strategies.
6. Develop Financial Skills
Working as a procurement officer demands a versatile skill set, including handling finances appropriately. The link between finance and procurement needs to be stronger than ever, with procurement professionals serving as a strategic aid to finance and having a firm grasp of the finance principles that govern their company. Business processes are moving faster, which means procurement also needs to move efficiently and be able to rely on their own knowledge in addition to finance’s expertise.
7. Lead in Innovation
While procurement officers will not be called upon to develop new technology, they should be aware of the developments in engineering, design, and product. They will want to be aware of what the best products are on the market. Understanding what new technology is of most use to the company—then procuring that technology—will help procurement professionals’ company to develop new innovations and compete in the market today.
8. Collaborate Effectively
Both external and internal collaboration is increasingly important as businesses become more connected. These collaborative efforts will be crucial for procurement teams to understand what the necessary goods are for their own company, what goods and services are the best, how to effectively manage their time and contracts, and how to properly outsource certain key functions of a company. The synergy created by interdepartmental communication will increase output, sales, revenue, and overall company efficiency.
9. Increase Transparency
Procurement officials need to be savvy in the realm of public relations. Because of social media and transparency laws, including Sarbanes-Oxley laws governing internal control, procurement practices need to be easily accessible, traceable, and explainable. Utilizing contract management technology, Salesforce software, procurement software, and other digital solutions increases transparency in a company by making records easily available with a full audit trail. Procurement teams need to be able to effectively navigate discussions with consumers, regulators, and the press, in addition to their current suppliers.
10. Analyze Key Performance Indicators (KPIs)
Once information has been gathered, whether from internal sources or from external sources, procurement professionals must improve their ability to handle and analyze KPIs. KPIs indicate the level of performance of a company—whether the procurement official’s own company or a supplier they are researching). If the procurement official is researching an external entity, then the KPIs will be an important indicator of risk. If the company has a poor record of reaching its goals or is unable to meet standard KPI, then that company may pose a greater risk. Understanding KPIs will continue to be an important method for improving risk management in the future both internally as an organization grows and externally as the supplier list expands.
As the face of business continues to change, new procurement skills must adopted. By being aware of these areas in procurement and future needs, procurement teams can strategically position themselves to optimize business success.