“Procurement is a professional skill set. However, we give department employees a day’s training and ask them to do professional work. That would be like getting rid of IT and asking people to run their own networks and servers.” —Stan Jester
That was the conclusion reached by a board member who recently insisted that a report assessing DeKalb County School District’s purchasing and procurement practices be made public. The assessment was brutal: the Atlanta-area district doesn’t train its employees, educate potential vendors, prioritize ethics, or ensure contracts are signed only by those with the authority to do so.
Whether it’s the Fat Leonard scandal with implications for national security or simply a case of asking people to perform functions for which they’ve been neither educated nor trained, procurement is not just a necessary administrative evil. Increasingly, procurement has become a strategic rather than a tactical function within organizations.
Scott Dance, Director of Hays Procurement & Supply Chain, cited five key skills for procurement professionals hoping to take their careers to the next level: communication; influencing; relationship management; change management; and negotiation skills. Online procurement certifications from organizations like the Next Level Purchasing Association include modules on negotiation and savings strategy development in their entry-level certification. Its highest level of certification includes courses on supply chain social responsibility and supplier diversity best practices.
A KPMG report listed four major challenges procurement leaders face today:
- Organization—legacy structures and a still-limited partnership between procurement and business functions;
- Systems and Technology—analytics not available to understand spend, controls, and risks;
- Risk and Controls—stricter regulatory and legal requirements and “loosely” delegated authorities; and
- Processes and Metrics—lack of standardized processes, inefficiencies, and procurement savings that aren’t measured consistently.
One example of the disconnect between procurement and business functions is contract management. If it isn’t part of the supply chain management process, it will be difficult to achieve cost reduction and mitigate risk while keeping inventory levels optimal.
Since procurement is so much more than just purchasing, it can help achieve competitive advantage by eliminating waste in the demand, source, and supply cycle. At the Open Government Partnership Global Summit held in May, 2019, Citymart’s Sasha Haselmayer identified three major tactics that benefit both buyers and suppliers:
- opening procurements by casting a wider net and avoiding overly prescriptive registration and certification requirements that may eliminate many potential suppliers;
- replacing technical specifications with measurable outcomes; and
- engaging every possible supplier rather than continuing to accept responses to RFPs and RFQs from primarily the same suppliers you’ve always used.
Continuing education for procurement professionals is available online. The Chartered Institute of Procurement & Supply (CIPS) offers online learning not only for MCIPS qualification but also on ethical procurement and short modules on many topics from contract management to sustainability to fill skills gaps.
The most widely recognized certifications for procurement professionals at career outset are
- Certificate in Procurement & Supply Operations;
- Certified International Procurement Professional; and
- Certified International Purchasing Manager.
There are also many online supply chain management degree programs. Some of these have been ranked and have had 20-year degree ROI estimates calculated.
One KMPG case study on procurement enhancement for an airport claims its redesign of a procurement operating model and creation of a transformation plan led to 5 to 10% in operating expense savings after an enterprise-wide procurement training program was implemented. At the very least, looking at the way procurement integrates with other business units within the organization can identify opportunities to plan technology buys so systems and databases are either enterprise-wide or accessible to procurement, not just accounting departments.
As machine-learning-based AI continues to be implemented throughout the supply chain, Natural Language Processing alone could be invaluable to an organization, with its ability to streamline auditing and compliance when language barriers between buyers and suppliers are eliminated. With machine-learning technology’s ability to analyze huge data sets to optimize delivery as well as balance supply and demand, procurement professionals will be able to focus on developing their soft skills: communicating, influencing, managing relationships, and negotiating.
Procurement scandals aside, the hit to a company’s bottom line by not investing in properly trained procurement professionals and in their continuing education isn’t something anyone can afford in today’s business climate: CIPS estimates procurement is responsible for up to 70% of corporate revenue.
For a list of upcoming global procurement industry events that could provide both networking and learning opportunities, click here.