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At Opticos, we firmly believe that effective Procurement teams need a diverse set of skills and competencies to manage the complexities of supply chain, strategic procurement assignments, sustainability requirements, and the fast digital adoption. Drawing from our collective experience and insights from our Procurement networks, we have identified four themes of Future Procurement Capabilities:
In this article, we will explore the evolving role of the Procurement team, and the capabilities required to manage global uncertainties and new requirements. We emphasize innovation, agility, and supplier relationship management as key factors for exceeding strategic advisory roles.
As highlighted in our first article, part one, we have explored new ways of working and fast adoption for Procurement solutions. Today, organizations are increasingly confronted with daily challenges such as macroeconomic factors, intensified customer expectations, and technological advancements. At Opticos, we recognize that Procurement holds a unique position with in-depth knowledge of both external and internal stakeholders, and to fully leverage this knowledge and advance towards strategic advisors, Procurement must adapt their ways of working rapidly.
Based on our collective experience and customer insights, Procurement professionals need to assume leadership roles to capitalize on their unique position. Actively seeking collaboration and cross-functional initiatives that will ensure responsibility and accountability across the organization. It will be especially important as market conditions remain dynamic and the prerequisites of suppliers, competitors, and partners are constantly evolving.
Additionally, as suppliers are shifting business and delivery models, Procurement leadership must cultivate a curiosity allowing procurement professionals to understand the impact and consequences on business. Maintaining flexibility and agility through extensive scenario planning is crucial to ensure Procurement can guide the organization through strategic advisory roles.
In our client experiences, Opticos have observed an increased role for Procurement in managing compliance and regulatory policies (AI, Data Management and Sustainability). This will need a strong collaboration approach through cross-functional teams to review, investigate and establish compliance policies and procedures to become compliant from authorities. An essential aspect of ensuring compliance is delegating responsibility as well as ownership within the organization. Procurement could distribute responsibilities across the organization by defining authority for both central and local procurement. For multinational organizations, many technological and sustainability regulations will require local responsibility thus empowering local procurement to act on these local regulations can help the organization navigate dynamic business environments effectively.
Further, connected to Procurement ways of working, it is important to embrace digital and technical advancements to move away from outdated and manual processes. Leaders in digital/technical embracement for Procurement need to focus on fast automation and digitalization of processes to reduce transactional work. At Opticos we have supported many organizations successfully reduce transactional work through digital tools enabling Procurement to further focus on strengthening strategic capabilities and partnership with suppliers.
Digital tools can also act as cornerstones for Procurement in delivering business value and support executive management with fact-based analytics and business decisions. To unluck the true value for Procurement the digital solution support will preferably be an automated and scalable allowing; procurement overall summary, supplier information and category management.
From Opticos experience, combining the above solution with smart contract management solution will yield a faster sourcing turnaround and ensure improved compliance targets. This will allow Procurement to work proactively ensuring the organization is prepared for ever-changing macroeconomic and geopolitical uncertainties.
In Opticos’ collaborations in our Procurement Networks and client dialogues, we have observed that Procurement leaders have increased their mandate and influence in the organization in recent years. We firmly believe this is driven by increased business and fact-based competencies to deliver strategic and valuable insights during market uncertainties such as the pandemic, inflation, and supply chain complications. Procurement is today uniquely positioned as a trusted strategic advisory organisation to executive management in delivering business value beyond traditional procurement activities such as cost savings and supplier task force activities.
It is important to maintain and sustain the strategic advisory roles to executive management for Procurement leaders. Key activities could be to establish and nurture robust stakeholder relationships, as well as deepening knowledge of suppliers, customers and products. Profound market capability is essential to be able to guide the organization on future regulations, on market trends, and knowledge share towards strategic and value-adding activities.
To ensure the everlasting development of new competencies, we at Opticos believe Procurement leaders need to focus on promoting, attracting and retaining talent, due to scarce resources in the employer market today. By allowing Procurement professionals to act as strategic advisors and embrace change management initiatives, these professionals will guide the organization in matters like early adopting new innovations and technology. This approach will create numerous opportunities for personal growth and foster a willingness to remain within the organization.
In the end, the personality profile and mindset of Procurement professionals, combined with their competencies, are crucial for ensuring a seamless transition into the next generation of Procurement leaders. A successful procurement professional needs to be both strategic and forward-thinking, while maintaining a curiosity for new market trends and business models presented by strategic suppliers, stakeholders, executives. This curiosity enables the identification and adaptation to new business scenarios, moving away from outdated supplier business models. The analytical and data driven mindset will bring expectations and accountability. Our participants in our Chief Procurement Network anticipate that the responsibility and accountability of Procurement has increased and will continue to increase in the coming years, particularly as they address new organizational initiatives such as AI and ESG.
Furthermore, a critical skill is the ability to collaborate with both external and internal stakeholders and network with strategic partners. Successful procurement organizations, through collaboration and networking, cultivate a storytelling and business value mindset, effectively presenting supply and market knowledge to executives.
In recent years, as this trend will continue to grow in importance, Procurement professionals must possess the ability to combine storytelling with data management and analytical skills. The decision-making process at organizational levels increasingly relies on data-driven information to build accountability and trust. Procurement could easily present business value for the company overall on extracts of the huge amount of data from supply chain information.
A final essential skill is embracing digital, product, and technology transformations. Procurement professionals must keep ahead of the latest developments in these areas to faster provide strategic advice to the organization. Falling behind on these developments and trends could result in Procurement losing its unique position as responsible advisor to management as well as the organizational struggling to build accountability.
Finally, Procurement’s role has expanded and evolved significantly in recent years, driven by its ability to provide strategic insights during market uncertainties like the pandemic, inflation, and supply chain issues. We believe that a successful procurement professional should be both strategic and forward-thinking, while maintaining a curiosity for market trends and business models. This curiosity enables the identification and adaptation to new innovations, moving away from previous business models in supplier chain.
Additionally, Procurement professionals must collaborate effectively with stakeholders and network with strategic partners, combining storytelling with data management and analytical skills. A strategic and analytical mindset also brings expectations, and our participants in our Procurement Network anticipate that the responsibility and accountability of Procurement will increase in the coming years, particularly as the organization will need to address key organizational initiatives related to AI innovations and sustainability requirements. It is a rapid development for all organizations and Procurement is not an exception.
Mattias Johansson & Marie Lund
