Talent Development in Procurement: The Skills and Roles ... · Talent Development in Procurement: The Skills and Roles Needed for Future Success. ... Prior to joining the Hackett

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Talent Development in Procurement: The Skills and Roles Needed for Future Success

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This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of which would provide a

competitive advantage to others. As a result, the reproduction, copying, or redistribution of this document or the contents contained herein, in whole or in part, for

any purpose is strictly prohibited without the prior written consent of The Hackett Group.

Copyright © 2017 The Hackett Group, World-Class Defined. All rights reserved.

3© 2016 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. The Hackett Group – Key Issues Study 2017

Kurt Albertson is a Principal with The Hackett Group with program responsibility for North American

Advisory programs focusing on client relationships, business development, research and program

delivery. Mr. Albertson works with over one hundred Global 1000 companies leveraging research and

thought leadership to provide strategic direction and best practice business advice within Procurement

and Finance.

Prior to joining the Hackett Group Mr. Albertson spent six years as a management consultant in

Sourcing and Procurement during which he worked with executives from dozens of large corporations

on sourcing, business and technical strategies, organizational and business process design, and

cultural change.

Mr. Albertson also has five years of automotive experience working in manufacturing, quality, and

operations. In this role he designed and implemented global manufacturing processes and supervised

production operations.

Mr. Albertson has been quoted in the Wall Street Journal and other major publications, has been the

key note speaker at many national events, and travels globally to support client objectives.

Kurt Albertson – Principal, Procurement Advisory Practice

Contact Information:

770-225-7570

[email protected]


Enabling World-Class: Hackett’s Solution PortfolioBenchmarking, Advisory, Business Transformation

▪ Unlimited inquiry access for members to Hackett experts for transformation steering

▪ Library of 2,500+ Best Practice Research Perspectives, Books of Numbers, and Hackett Certified Best

Practices through the Best Practice Intelligence Center

▪ Peer-to-Leader 1-2-1 Best Practices sharing, and Best Practices networking events

▪ Enterprise, functional and process-based performance studies & value accelerators

▪ “Gold Standard” Benchmark – over 8,500 conducted, the empirical backbone for your transformation at the

SG&A Enterprise, Functional, and Process level.

▪ World-Class, Peer, and Custom Peer comparative metrics and best practices

▪ Ability to provide multiyear World-Class Program view of performance over time

▪ Hackett Performance Exchange (automatic accumulation of performance data from Oracle or SAP

▪ Finance

▪ Human Resources

▪ Information Technology

▪ Procurement

▪ Supply Chain and Operations

Membership

Advisory &

Research (Provides insights into World

Class Performance)

Benchmarking(Defines World Class

Performance)Hackett Perspective on World-Class Finance – Accelerating GBS | 9

Peer Group World Class

The World-Class Advantage – FinanceWorld-Class organizations always find a way to get there

IT Cost (per end user Equivalent)

Procurement Cost (% of spend)


23%

$1.7K$2.2K

HR Cost (per employee)


19%

0.59%0.73%$6.0K

22%

2014 Cost of Finance by Process Category (as a % of revenue)

Finance Cost (% of revenue)


1.12% 46%

-59%-46%

-23%

0.60%$7.7K

0.39%

0.21% 0.23%

0.16%0.11%

0.17%

Transacting Control & Risk Planning & Strategy

Practice or

Outcome

Process

Taxonomy

Vision

Dimension

SDM

Component

Capability /

Enabler 1 - Lagging 2 - Achieving 3 - Exceeding 4 - Leading

Current

State

Assessment

PriorityFuture State

TargetAverage Gap

Practice

Sourcing and

Supply Base

Strategy

Supply

Assurance

Process

Design

Degree to which a

sourcing strategy

exists

Sourcing strategy is ad hoc or

nonexistent.

Sourcing strategies reflect and are

aligned with overall business

strategy and objectives, including

high level risk requirements.

Historical spend analyses are

regularly and routinely conducted

by market and across markets -

i.e. by specific commodity, service,

location and business.

Commodity management and

sourcing strategies define

appropriate purchasing and

payment processes and tools.

Contract terms, lengths, and

conditions are defined to drive

optimal benefits to the enterprise;

in terms of total life-cycle cost,

service, and quality.

Sourcing strategy is reviewed and

updated annually (or more

frequently) to reflect direct linkage

to the company's strategic growth

plans, market changes and

product innovations, production

plans and business

M&A/ventures.

2 - Achieving 2 - Medium 3 - Exceeding 1.00

Practice

Sourcing and

Supply Base

Strategy

Supply

Assurance

Process

Design

Breadth of supplier

universe

Supplier selection is based on

historical or personal

relationships; suppliers often

selected prior to Procurement’s

involvement in a project.

Projects are initiated to limit the

total number of suppliers and

bundle the spend volume.

Procurement is involved in the

supplier selection process.

Suppliers are often considered on

a regional or compartmentalized

basis.

Supplier universe is considered

by major commodity or service

area rather than in aggregate.

Suppliers are considered for

bundled and/or extended services

that may extend to multiple areas

of competency.

Supply universe is global and not

limited to traditional commodity

suppliers.

1 - Lagging 2 - Medium 2 - Achieving 1.00

Practice

Sourcing and

Supply Base

Strategy

Supply

Assurance

Process

Design

Degree to which

supplier risk is

measured and

managed within the

sourcing process

Risk not considered as part of

sourcing decisions or supplier

management.

Supply risk is considered as part

of category-specific sourcing

efforts and supplier performance

management processes.

Supply base risk is explicitly

factored into broader business

continuity objectives. Supplier

risk is considered beyond the

specific good or service being

sourced.

Procurement works with other risk

management staff, ensuring

alignment between internal

risk/return preferences, business

objectives, and both general and

specific supply market risks.

3 - Exceeding 3 - High 4 - Leading 0.90

Practice

Sourcing and

Supply Base

Strategy

Supply

Assurance

Process

Design

Degree of

contingency

planning performed

to assure supply

No supply contingency planning

exists.

Contingency plan exists in case of

supply shortage; alternate

suppliers and alternate locations

identified.

Alternative supply sources are

developed in conjunction with

current suppliers for key

purchases.

Back-up suppliers are required for

critical or strategic categories and

items, including formalized

contingency plans to ensure

seamless supplier transition and

application of penalties and

liabilities with supplier(s) at fault.

3 - Exceeding 2 - Medium 3 - Exceeding -0.55

Practice

Sourcing and

Supply Base

Strategy

Supply

Assurance

Process

Design

Degree of supplier

qualification in

place

No formal supplier qualification

process.

Simple processes in place to

register suppliers and inspect

supplier qualifications at time of

registration or category review.

Established supplier training

program on enablement

strategies and buyer’s

technologies. Formal program

exists to identify key qualification

metrics with stratification based

on category criticality and supply

alternatives.

Annual review of at risk suppliers

and suppliers of key categories.2 - Achieving 2 - Medium 2 - Achieving 0.37

Practice

Sourcing and

Supply Base

Strategy

Supply

Assurance

Process

Design

Degree of

effectiveness and

efficiency of price

refresh process

Quoting and price refresh process

is undefined and performed

manually and on an ad hoc basis.

Quoting and price refresh process

is defined and audited manually.

Quoting and price refresh

processes are structured to

minimize enterprise financial

impact to all parties.

Quoting and price refresh

processes are automated, nearly

error-proof,, with appropriate

controls in place..

2 - Achieving 2 - Medium 2 - Achieving 0.46

Practice

Sourcing and

Supply Base

Strategy

Purchased

Cost

Reduction

Process

Design

Level of

rationalization of

supply base size

Large number of suppliers due to

short-term, “one-off” relationships.

Organization has identified the

need to rationalize the number of

suppliers in order to create

leverage.

Supply base rationalization is

complete. Few new suppliers are

needed and an added supplier

typically results in a removed

supplier (equilibrium). Strong

relationships developed with

current suppliers focusing on JPI

in critical or large dollar spend

areas.

Structured process is in place that

benchmarks the marketplace and

ensures continual supply base

assessment.


Practice

Sourcing and

Supply Base

Strategy

Purchased

Cost

Reduction

Process

Design

Maturity of use of

supply market

intelligence

Supply market knowledge is ad

hoc and incomplete.

Process, tools, and sources

established to gather and

organize data on most categories.

Supply market intelligence /

knowledge captured to identify

when a supply strategy needs to

be re-visited.

Supply market intelligence /

knowledge captured, modeled,

and utilized for pro-forma

simulations done during strategic

planning, design, sales, etc.


Business

Transformation(Transforms Performance into

World Class)

Service

Delivery

Components

Information

Service

Placement /

Scope

Process

Sourcing /

Location

Strategy

Process

Design

Enabling

Technology

Skills &

Talent

Governance

&Organization

▪ Enterprise Performance Management

▪ Shared Services, Global Business Services & Outsourcing

▪ Merger Integration

▪ Working Capital Management

▪ Oracle EPM (Platinum Partner)

▪ SAP ERP (Gold Partner)

▪ Hyperion

▪ Kronos

▪ Workforce Management

▪ Application Managed Services

▪ Source to Pay Solutions

– Assessment

– Selection

– Implementation

– Change Management

Best Practice

Technology

Enablement(Implements Technology to

enable World Class)

In

-h

ou

se

Co

mp

le

te

O

utso

urc

in

g

Colo

catio

n

CustomerResponsibility

ProviderResponsibility

Sa

aS

A

pp

lic

atio

ns


Let’s look at how executives feel about the importance of current procurement capability gaps in driving their objectives

Improve procurement analytical, modeling and reporting capabilities

Align procurement skills and talent with changing business needs

Measure and manage procurement performance and business value

Modernize procurement application platform(s)

Improve procurement responsiveness to changes in business demands

Increase spend influence though strategic sourcing

Obtain more value from existing categories through category management

Obtain more value from existing suppliers through SRM

Expand procurement work executed in GBS / SSO

Invest in procurement CoE to enhance ability to provide value added services

Invest in supply market intelligence capabilities

Reduce procurement operating cost

Refine continuous improvement programs and techniques

Increase budget for procurement software tools

Invest in procurement technology other than software

78%

73%

72%

70%

70%

64%

62%

56%

45%

43%

42%

33%

33%

33%

22% High/Very High

6© 2017 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Cyber / information security

Current and projected business riskCyber security risk tops the list overall while competition and talent are forecasting the biggest projected increase

Percentage of companies ranking as “high risk”

Source: 2017 Key Issues Study, The Hackett Group

2016

(current)

2017-2018

(projected increase)

Intensified competition

Disruptive innovation

Access to critical talent

47%

41%

32%

31%

20%

17%

24%

20%


Data analysis and modeling

Organizational know-how

Group collaboration/facilitation

SRM expertise

Business acumen

Specific supply market/commodity expertise

Strategic thinking and analysis

Problem-solving

Strategic sourcing process expertise

Relationship management and interpersonal

Critical procurement skills

Summarizing the most widely needed skills in procurement: Dominated by business skills

Low Medium High

GENERAL BUSINESS SKILL PROCUREMENT-SPECIFIC SKILL

Scale:

Low = A critical skill for <25% of positions

Medium = A critical skill for 25-50% of positions

High = A critical skill for 51-100% of positions

Source: Skills and Talent Outlook, The Hackett Group, 2014

Business Skills

are generally

more transferable

across functions

and roles while

Procurement

skills tend to be

more relevant to

Procurement and

related roles


Business skills are generally felt to be more impactful when it comes

to driving the performance objectives of procurement

18%

32%

Non-Top Performers Top Performers

Procurement Specialist Skills(Substantial or Very Large Performance Impact)

71%

83%

Non-Top Performers Top Performers

General Business Skills(Substantial or Very Large Performance Impact)

Percent of skills across all companies

rated as having a “substantial” or “very

large” performance impact on

Procurement objectives

Hackett Talent Management Study 2011


SRM, Risk Mgmt, Strategic Thinking and Change Mgmt are biggest movers with respect to future demand

S U P P L Y R IS K MA N A GE MEN T E X P E R T IS E

C H A N GE MA N A GE MEN T A N D P R OC E S S IMP R OV E MEN T

D A T A A N A L Y S IS A N D MOD E L IN G

B U S IN E S S A C U ME N

S T R A T E GIC S OU R C IN G P R OC E S S E X P E R T ISE

R E L A T ION SHIP MA N A GE ME NT A N D IN T E R P E R SONA L S K ILL S

S T R A T E GIC T H IN K IN G A N D A N A L Y S IS

SRM EXPERT ISE

CURRENT DEMAND NET DEMAND INCREASE IN NEXT 2-3 YEARS

Percent of companies ranking demand

for skill as “high” or “extremely high”Percentage

increase

43%

30%

13%

0%

10%

16%

45%

30%



Culture: Pfizer’s highlights the importance of driving positive change through its culture champion network


What makes culture agile?

“Our most important asset is our people. We’re trying to

approach recruitment differently than in the past. I’m not

convinced we necessarily need to hire only people who

have done sourcing before. Rather than hiring for

experience, we look for candidates with the right skills to

succeed. Sometimes you need a combination of skills

and experience, but ultimately, I want people with an

entrepreneurial spirit, who want to build something new,

are quick learners and logical thinkers, but who can also

build relationships. We can train them in our sourcing

process, but softer skills are more difficult to teach.”

Frederic Khalil

VP, Head of Source-to-Pay and

Corporate Services

Guardian Life Insurance

Company of America

Leadership: Guardian recruits and develops future leaders by fostering an entrepreneurial spirit, focusing on relationship skills

▪ "Outside the box" recruiting

(offshore and onshore)

▪ Cross-training and lunchbox training

▪ Career track program

Recruit,

train and develop

careers

▪ Single mission

▪ Shared cascading objectives

▪ Team events (incl. Community

volunteering)

▪ Physical seating

Build “One Team”

▪ Department meetings

▪ Intellectual capital building

▪ Process improvement

▪ Corporate projects volunteering

Foster ownership

and initiatives

▪ Newsletters

▪ Recognition and rewards program

▪ Department trophy ceremony

Reward and

recognize

performance

Source: Guardian


Ultimately, becoming more agile requires innovators, not optimizers

“A lot of procurement executives have been molded and developed in their careers to become optimizers, but

we need innovators. In the past, managers often took comfort in hiring like-minded people, which yielded a

kind of group-think that is not sustainable. You may get a temporary lift for a few years when someone comes

in and optimizes something, but when you are challenged to change the model altogether, it is very difficult.

Transformation requires people who bring individual creativity and thinking to the table and are willing to raise

controversial issues and consider alternative ideas.”

Ramsay Chu

Global Head of Procurement

Rio Tinto Group


Four pillars support

procurement’s digital

business strategy

Data and analytics

form the foundation

Let’s talk about what digital transformation means to procurement by reviewing Hackett’s Procurement Digital Transformation framework

The Digital Business Strategy

2Omnichannel,

personalized

stakeholder

experience

3Digitally

enabled

procurement

workforce

4“Smart”

orchestration of

source-to-pay

services

5Ecosystem of

networked

solutions

1 Analytics-driven insights


Thriving in the digitally enabled workforce will require these 6 skills

Business Acumen

Understand key business drivers

Knowledge of factors, priorities and business demands

Identify problems and prioritize alternatives

Relationship Management

Advanced interpersonal skills

Positively influence decisions

Open and approachable

Supply Risk Management Expertise

Assess and prioritize business and category-specific risks

Measure, prioritize, and address risk

Develop risk mitigation plans for high-priority drivers

Data Analysis and Modeling

Process data and extract relevant information

Knowledge of analytical tools and methodologies

Translates analyses into actionable plans

Strategic Mindset

Develop strategic frameworks and visions

Anticipates market changes

Address challenges and outline future direction

Savings and Financial Analysis

Translate savings and value improvements to P&L impact

Develop tools to track, measure and forecast savings

Analyze supplier financial statements for detailed insights


Why it Matters

As economic volatility increases, category managers

will need to sit side by side with their stakeholders,

navigating business decisions that impact the supply

base. Business acumen is fundamental to elevating

procurement’s role as a trusted advisor.

Key Skill: Business Acumen

Individuals with strong business acumen:

▪ Understand how key business drivers relate to one other

and are impacted by competing courses of actions

▪ Have deep knowledge of factors, priorities, and

demands that influence business decisions

▪ Are experts in how to identify problems, prioritize

alternatives, and implement solutions

▪ Understand interdependencies across business

functions

▪ Are capability of managing uncertain situations and

remain flexible in the face of shifting circumstances

▪ Navigates the short- and long-term trade-offs of

business decisions

How to Build it

• Learn finance and operations basics

• Take job rotations

• Monitor industry research

• Spend time in one company/industry


Why it Matters

Evolving the value of procurement requires working

hand in hand cross functionally with a variety of

stakeholders – from senior budget owners to line

managers – as well as being a customer of choice

and partnering with valuable suppliers.

Key Skill: Relationship Management

Individuals with strong relationship

management skills:

▪ Use advanced interpersonal skills to build relationships

that drive business outcomes

▪ Treat individuals from all levels of the organization with

courtesy

▪ Meet with others and listen to their perspective on

business issues.

▪ Interact with internal and external peers to positively

influence decisions

▪ Are consistently open and approachable when resolving

highly sensitive and complex issues

▪ Build strong relationships with senior leadership

How to Build it

• Build your soft skills: Listening, learning and caring

• Embrace diversity

• Check your subtle cues

• Be approachable… and approach others


Why it Matters

In a market of increased risk and volatility, risk

management capabilities are more prominent to the

enterprise. Responsiveness to market and outside

threats will determine which companies survive. The

next economic downturn or crisis may be revealing.

Key Skill: Risk Management

Individuals with strong risk management skills:

▪ Are considered an expert in assessing and prioritizing

business and category-specific risks

▪ Develop templates and frameworks to measure,

prioritize, and address risk

▪ Lead others in the development of risk mitigation plans

for high-priority drivers

▪ Adopt emerging technologies like advanced analytics

and cognitive tools to better assess, monitor and

mitigate risk factors to the businessHow to Build it

• Know your industry risk factors

• Include risk in your category plans

• Read up on risk

• Pay attention to technology developments


Why it Matters

Even the most digital organization needs strong

leaders to navigate the ship. Understanding the

broader market and aligning procurement’s vision with

that of the business will be fundamental to navigating

change and extracting value from the supply base.

Key Skill: Strategic Mindset

Individuals with a strategic mindset:

▪ Are experts at developing strategic frameworks and

setting a vision for the organization

▪ Serve as a key resource to advise others

▪ Anticipate market changes and establish a vision to

affect change through formulation and implementation of

objectives and priorities

▪ Are able to lead a strategic planning team to address

major challenges and outline future direction for the

organizationHow to Build it

• Learn about corporate strategy – visit a MOOC

• Understand your broader business objectives and

challenges

• Be a leader


Why it Matters

Big data will change the way we use information in

procurement. Those able to sort through the data and

make actionable plans have the potential to add high

value to the organization. The tools are available

today, but adoption is just beginning

Key Skill: Data Analysis and Reporting

Individuals with analysis and reporting skills:

▪ Possess expert ability to process data and synthesize

disparate sources to extract relevant information

▪ Hold deep knowledge of analytical tools and

methodologies

▪ Design training programs for data development and

analytics to support organizational needs and guide

analysis teams to address data needs and objectives

▪ Are able to query complex data sets and derive

conclusions, as well as translate disparate analyses into

actionable business plans

▪ Have insight to think mathematically and model complex

problems with robust statistical tools

▪ Support all hypothesis and recommendations with

relevant quantitative information

How to Build it

• Train yourself on the latest analytical tools

• Start with your own spend cube

• Learn from others


Why it Matters

Tying savings and value benefits to financial

statements demonstrates the value of procurement,

but more importantly drives business profitability.

Tying budget favorability to procurement actions can

be elusive but critical.

Key Skill: Savings and Financial Analysis

Individuals with strong savings and financial

analysis skills:

▪ Are experts in translating spend, savings, and value

improvements to impact on P&L

▪ Demonstrate ability to develop new and creative tools to

track, measure, and forecast impacts of savings and

broader value

▪ Share expertise with sourcing team and finance

department to guide projects

▪ Have the ability to analyze supplier financial statements

for detailed insights

How to Build it

• Make a visit to finance

• Take a class

• Lead a project


There are a broad array of procurement’s skills and talent concerns keeping CPOs up at night…where to focus?

Most serious concerns Serious concerns Moderate concerns Least serious concerns

Ability to attract

and retain

Developing

leadership capability

within procurementAlignment of procurement

staff skills with changing

requirements

Procurement managers’

people mgmt. &

development capabilities

Training and developing the skills of

procurement staff

Ability to offer learning &

career progression opps.

Communication vehicles

and styles appropriate

for/preferred by younger

workers

Impact of increasing use of

and dependence on

technology by procurement

Productively integrating new

generation of workers into

the company

Impact of growing use of outsourcing on

staff development and career paths

Maintain adequate skill levels

as older workers retire

Dealing with varying talent

mgmt. requirements of staff in

different regions

Impact of increasing

globalization/ offshoring of

procurement resources


Most pressing…. Leadership

Attract and retain talent

Learning and career

progression opportunities

Staff skills

development

People mgmt

skills


Procurement organizations leading the talent race are putting in the effort to attract and build their digital workforce

Function, not HR, takes ownership for Talent

Management processes

Implement a vision within the function for talent

Engage in workforce planning activities, and do

more to define talent needs and skills

Perceived to be more open to innovation and offering more learning and career

growth

Greater use of intern and employee referral programs

More fully developed career paths, particularly early and

mid-career


Large Financial Services firm builds a predictive model for hiring & retaining high performing sales team.

Undertook an analysis of Average vs Top Performers:

- Demographics

- Job Experience

New ways of hiring: Predictive analytics for hiring starts with understanding what drives success in the current role

Source: http://dupress.com/articles/dr14-datafication-of-hr/

By shifting to a new way of

assessing sales candidates, the company

generated more than $4 million of new

revenue in the first six months.

Will this work for Procurement?

Why not – the qualifications are quite

similar

- Recruiting data

- Environmental data


New procurement roles: Head of Cognitive Procurement and Digital Sourcing

What makes a head of cognitive procurement?

Data analysis and

Modeling

Business acumen

Strategic

Mindset


New ways of learning: Its time to modernize the learning approach

To improve learning/development across

generations:

✓ Use a blended learning approach

✓ Make learning real time and relevant through

bite-sized learning

✓ Take advantage of reverse mentoring

opportunities

✓ Make learning fun and engaging through

gamification (ex. MIT Supply Chain Beer

Game)

✓ Train on how to access the right

information/knowledge

✓ Develop a more collaborative environment

leveraging today’s technologies

Source: ASTD

Explosion of social media provides new

ways of learning and knowledge sharing


New Cultures: Characteristics of an agile procurement culture

Agile procurement organization

Low agility Agility enabler High agility

Change averse culture, preserve status

quo, focus on resource utilization

Embrace change, view change as an

opportunity, focus on business outcomes

Bureaucratic decision-making, lacks

empowerment, fosters inappropriate risk

taking

Delegated decision-making authority,

change-oriented leadership, calculated risk

taking

Talent tied to specific roles, common talent

management strategies for all roles, limited

learning and development, life-long

procurement

Flexible talent placement, talent

management tailored to needs of roles,

continuous learning and development,

rotation

Talent

Leadership

Culture

Low HighAgility enablement index


How to get started on creating an agile Procurement culture?

1. Training is conducted in the field, not in a classroom. It is creative, engaging, challenging

and specific/based on real-life scenarios.

2. Staff is rotated within and between business units and geographies, developing potential

future leaders who have a broad understanding of the entire value chain.

3. Recruiting and hiring draws from outside the typical pool of procurement and sourcing

specialists. Softer skills like relationship management, intellectual curiosity and business

acumen are highly valued.

4. Procurement’s culture is defined by successfully challenging the status quo, influencing

leadership to try something different. It is a “constructive disrupter,” displacing traditional, less

efficient processes with new, creative solutions that are able to scale with the future strategy.


Procurement talent management requires an integrated approach aligning with business strategies and desired outcomes

Integrated Talent Management

Acquire Talent

Recruiting

Hiring

3rd Parties

Drive Employee

Performance

Appraisal

Retention

Collaboration & Knowledge

Sharing

Identify Talent Needs

Workforce Planning and Succession Management

Develop Talent

Learning and Development

Integrated Talent Management Outcomes

• High

functional

performance

• Engaged,

high

performing

staff

• Improved

staff retention

• Right people

with right

skills

• Aligned

culture

Business and Function Strategies

• Business and

function mission

and goals

• Function roles &

responsibilities

• Organizational

culture

• Industry and

geographic

trends

• Core skills

trends

• Talent pool

trends

Skills Demand

Skills Supply


14%

8%

11%

11%

51%

13%

29%

19%

22%

24%

42%

42%

49%

49%

11%

37%

18%

22%

30%

Recruiting and staffing

Learning and development

Managing performance

Retention

Workforce planning and succession management

Function consults, but process is owned by HR

Close collaboration with HR, but HR drives the process

Close collaboration with HR, but function drives the process

Function leads with limited or no HR involvement

Procurement must lead this talent management effort in collaboration with HR. Don’t expect any different

Q3.8 Please indicate the extent to which your Procurement function owns the following human

capital programs for its own personnel.


Critical to procurement’s talent management success is the continued drive towards specialization

Procurement Management

Team

Purchase-to-PayCustomer

Management

Knowledge

Center-of-ExcellenceSpend Management

2

# Maturity of evolution

Tactical Sourcing

4365

1

Other less common components: Innovation, sales support


Hackett’s competency model for example aligns desired attainment level of skills to each of roles within Procurement

The Hackett Group Competency Model


High

HighEffectiveness

Util

izat

ion

LowLow

Poor Performers Underperformers Second Tier Top TierM

ajor

ityN

iche

RECRUITING HIRING

Bro

adly

Use

dU

biqu

itous

-

Mixed outcomes from recruiting and hiring practices

• Few recruiting practices

are highly effective

• Even highly effective

hiring practices are not

very broadly used

• Top Performers make

more use of intern and

employee referral

programs

Hiring from External

Service Providers

Intern Program

Referral Programs

Search Firms

Recruiting from other Parts of Organization

Internet Job Websites

Social Networking Sites

Aptitude Tests

Psychographic Profiling and Testing Signing Bonuses

Involving Best

Employees

Behavioral

Interviewing


High

HighEffectiveness

Util

izat

ion

LowLow

Poor Performers Underperformers Second Tier Top Tier

Maj

ority

Nic

heB

road

ly U

sed

Ubi

quito

us

-

on-

-

Coaches and mentors

Coaches and mentors

can make a real

difference, but are

among the most difficult

practices to implement

From a development perspective classroom training may be broadly used but many have not found it effective

Leadership Develop Programs

Stretch Assignments

Industry Education

Formal Classroom Training

Web-enabled L&D Prog

On-the-job training


What helps drive retention and supports appraisals?

High

HighEffectiveness

Util

izat

ion

LowLow

Poor Performers Underperformers Second Tier Top TierM

ajor

ityN

iche

STAFF RETENTION STAFF APPRAISAL

Bro

adly

Use

dU

biqu

itous

-

360 reviews and forced

rankings are much more

effective for Top

Performers vs. Peers

NOTHING is as

effective as regular

informal performance

conversations – and

thus the heightened

demand for good people

managers

Forced Ranking Appraisals

360 Degree Appraisals

Annual Performance ReviewsRegular Informal Performance

Conversation & Feedback

Recognition Programs

Flexible WorkingCompensation/Bonus

Learning & Development Career Progression


22% 22% 14%17% 6%33%

Exploring / pilotingimplementation

Implemented on smallscale

Implemented onsignificant/Large scale

24% 16% 21%11% 17% 28%




21% 18% 24%11% 22% 22%




Entry level to first

management position

First management to middle

management

Middle management to

executive management

Top PerformerPeer

Most companies have not implemented career paths, despite them being a key tool for retention

Are multiple paths needed?


Thoughts on orchestration and intelligence augmentation

“Over time I think we will probably see a closer merger of biological intelligence and

digital intelligence”

- Tesla CEO Elon Musk

“Ultimately, it’s not going to be about human vs. machine. We humans have creativity, empathy, emotion, physicality, and insight that can then be mixed with powerful A.I. computation—the ability to reason over large amounts of data and do pattern recognition more quickly—to help move society forward.”

- Microsoft CEO Satya Nadella


How will different activities and industries be affected by intelligent automation?

Applying

Expertise

Managing

People

Interfacing with

Stakeholders

Unpredictable

physical

Collecting

data

Processing

data

Predictable

physical

27

35

35

36

36

39

40

41

43

44

44

47

49

51

53

57

58

60

73

Automation potential %

Accommodation and food

servicesManufacturing

Agriculture

Transportation and

warehousing

Retailers

Mining

Other services

Construction

Utilities

Wholesalers

Finance and insurance

Arts, entertainment and

recreationReal estate

Administrative

Health care

Information

Professionals

Management

Educational services

Industry Sector

Source: US Bureau of Labor Statistics, McKinsey Global Institute


The question of our time: What will Procurement look like in 10 years?

It will look very different from today

▪ Transactional tasks may be entirely automated

▪ Sourcing activities may be executed electronically with little need for human intervention

▪Data analysis will be embedded into our information systems

However…..

There will always be a need for interpersonal relationships, values based

decision making, creativity, and judgement to harness the value of the supply

network.

As humans have in the past, we will adapt our personal value and our

surroundings for success


Contact information

KURT ALBERTSONPRINCIPAL, PROCUREMENT ADVISORY

1000 Abernathy Rd

Suite 1400

Atlanta, GA 30338

Tel.: 770.225.7570

[email protected]

Documents

Talent Development in Procurement: The Skills and Roles ... · Talent Development in Procurement: The Skills and Roles Needed for Future Success. ... Prior to joining the Hackett