Category Archives: Talent

Procurement Trend #17. Talent

Fourteen anti-trends from the grey-beards’ glory days still remain, and as much as we’d like to provide more entertainment to LOLCat who is bored with our anti-trend coverage, we must make sure that no good deed goes unpunished and since the futurists’ advice is as good as it gets, we must break it all down until you can look past the shiny new paint job and realize that it’s a twenty year old Skoda you are being sold.

So why do so many historians keep pegging talent as a future trend? Besides the fact that they are, unfortunately, still cemented in the people-process-technology (and not the talent-technology-transition management) mindset, it is probably because, no matter where your organization is on its Supply Management journey:

  • more knowledge is required

    Supply Management professionals are currently climbing the Devil’s Staircase

  • more technology is required

    because most work is still tactical paper pushing work (even if it’s pushing scanned PDFs, it’s still paper pushing work)

  • more skills are required

    to transition to better processes, use new technology, and identify more value generation opportunities for the organization

So what does this mean?

Knowledge

As per our previous posts on inter-departmental collaboration and more stakeholder collaboration you need to implement knowledge management. You need to capture the knowledge you have. You need to capture the knowledge your partners bring you. And you definitely to capture the knowledge you generate before it walks out the door when your people move on to the next stage of their professional and/or personal life. It is a knowledge economy, and if you don’t have the knowledge required, you won’t be in the new economy much longer. C’est la vie dans le nouveau monde de l’enterprise.

Technology

As per our previous posts on increased accuracy in demand planning, process convergence into Supply Management, and e-Procurement System Adoption, you need to implement new and better technology solutions. These solutions need to automate the tactical, optimize the operations, and enable the strategic. Electronically pushing paper is not strategic. Monitoring dashboards is not strategic. Re-sourcing a category for the third time through an e-Auction for a measly 3% savings is not strategic. Doing detailed analyses that allow you to identify untapped opportunities, define new processes that will get marketing or legal on-board with spend management methodologies, or helping R&D design a product that is both more cost efficient to produce and more desirable to the market — that’s strategic.

Skills

It’s like we keep saying here at SI, a modern Supply Management professional needs to be a jack of all trades and a master of one. You need to continually enhance your soft skills, your tech skills, and your knowledge of different organizational disciplines, processes, and goals and learn to take advantage of the new technologies and opportunities that are continually being made available to you.

Procurement Trend #18. Improved Supply Management Skill Set

Fifteen anti-trends still remain but today we can take solace in the fact that we have finally finished with the “old news” anti-trends and have reached the “ongoing” blues anti-trends. While these anti-trends are still “old news”, most are only a few decades old, as opposed to some of the earlier trends we debunked which described situations encountered by many business centuries ago (which is when globalization really began).

So why do the modern historians continue to peg an improved supply management skill set as a future trend? Maybe it’s because they’ve only recently been expelled from an old-school Procurement organization into this brave new world, and this is as far as they’ve made it in their readings, but three likely reasons are:

  • technology is progressing rapidly

    and much faster than the average person can be reasonably expected to keep up with

  • the breadth of supply management continues to expand

    and new categories and responsibilities are often added to Supply Management’s (shared) purview on a regular basis

  • processes aren’t keeping up

    and Supply Managers are getting buried under an avalanche of tactical demands

So what does this mean?

Rapid Technology Progression

Your organization, and in particular, your talent, needs to keep up. Regular training is going to be required for your talent, and thus your organization to keep up. You will have to fight for this though, because despite the fact that it has been among the top three or top five concerns of most CPOs and CXOs for the past five years, the training budget is always the first budget to get cut.

Expanding Supply Management Breadth

This is a good thing, but you your Supply Management organization needs to keep up, not fall behind. The tech progression is a good starting point, the training is a good continuation, but you need to also learn other areas of the business – their language, processes, and goals so that you can collaborate with them, learn their wisdom, and, if possible, share the workload.

Processes Need to Move Out of the Past

Processes need to continually progress forward — that’s why SI is all about Transition management and not just focussed on the classic people-product-technology triangle (as it’s actually talent-technology-transition management). You will have to conduct process reviews not only on all Procurement processes, but on all related operational processes to determine if they can be made more efficient, reliable, or better, identify what new processes would look like, determine if the current technology platforms can support these new processes or if new platforms are needed, and create, and then execute on, appropriate transition plans.

Procurement Trend #25: More Stakeholder Collaboration

Twenty-two dull, swampy, trends from the days of yore still remain, so let’s go full steam ahead. The sooner we get through these, the sooner you stop getting fooled by snake-oil salesmen.

So why do so many historians keep pegging more stakeholder collaboration as a future trend, while helps poor LOLCats everywhere regress to past lives? There are a number of reasons, but among the top three today are:

  • knowledge-based outsourcing requires knowledgeand one cannot outsource even a tactical function and expect results without an understanding of what is required for success
  • process based outsourcing requires process managersand one cannot outsource even basic processes, such as the regular purchase of on-contract indirect items, group purchasing of items not strategic enough for sourcing, or even building management without regular oversight of those processes
  • transitioning to better ways requires team inputit’s hard enough for Procurement to outsource tactical Procurement processes without a solid understanding of those processes, so imagine the difficulty in helping the company outsource other back-office or front-office functions without a good understanding of those functions, which will require input and cross-departmental collaboration from other organizational team members

So what do you do about this?

Knowledge-Based Outsourcing

As per our prior discussion, you need to institute knowledge management and web-based collaboration tools ASAP to insure that all appropriate knowledge is captured, organized, reviewed, delivered, improved, and learnt from. You need knowledge to initiate the process, to manage the process, and to capture the results of the process so that it can be effectively repeated — inside or outside the organization, as circumstances desire.

Process-Based Outsourcing

As more back-office and front-office functions get outsourced, more and better change management is going to be required. When functions get outsourced, everything changes, and that change has to be managed. Not only does the transition has to be managed, but so does the process oversight, because at some point the provider might have to change or circumstances may change and the function needs to be brought back in house. The Procurement team will have to be become well-versed in change models such as Kotter’s 8-Step Change Model or ADKAR and also learn how to integrate them with team management.

Team Management

As indicated above, success is going to depend on the creation and effective management of cross-disciplinary teams that can effectively document, transition, and manage the processes being outsourced and, in some cases, being taken back in house because the wrong processes were sent out. The team will have to be become intimately familiar with team performance models, such as the Drexler/Sibbet, and become good at integrating these models with the chosen change management model.

Why Are There No World Class Procurement Organizations in Asia Pacific?

A recent brief by Bain on Winning With Procurement in Asia, released last December, in which they summarize the results of interviews conducted with 60 business heads and CPOs throughout Asia-Pacific, stated that while many of these business heads and CPOs report their Procurement capabilities as fair, or even good, none report their Procurement capabilities as great. Why?

According to the article, procurement teams in Asia-Pacific often
(1) lack organizational support and prominence,

(2) tend to focus on short-term activities,

(3) rely on inadequate demand management processes, and

(4) struggle with underdeveloped supply bases and insufficient core procurement processes such as category management.

In addition, they lack

(5) systematic supplier management processes,

(6) reliable data systems and

(7) strong procurement talent. Moreover, even though some companies make a point of investing in procurement talent, they fail to take the critical move of defining a clear career path for procurement professionals.

In other words, it’s the classic Triple-T Problem — a lack of talent, technology, and transition management. If we go through the list, we see that (7) is the talent problem, (6) is the technology problem, and (1) though (5) are an example of a lack of transition management.

The lack of systematic supplier management processes in (5) is a result of not transitioning to modern supplier management processes driven off of modern supplier management systems.

As a result of the lack of systematic supplier management processes, which is a direct result of poor, or nonexistent, transition management, these organizations are (4) struggling with underdeveloped supply bases and insufficient core procurement processes.

As they haven’t transitioned to newer Supply Management processes, these organizations are still suffering from (3) inadequate demand management processes.

Furthermore, as a result of not transitioning to newer Supply Management processes, with a longer term outlook, they (2) tend to focus on short term activities.

And, finally, as they have not helped the organization as a whole transition to better supply-management inspired business processes, they still have to deal with (1) a lack organizational support and prominence.

At home or abroad, good Procurement and Supply Management starts with the 3 T’s — talent, technology and transition (management). Without meeting this necessary condition, an organization will never be great.

The Intersection of Talent, Technology, and Transition – How Do You Balance It?

Supply Chains run on talent, technology, and good transition management — but it’s a difficult recipe to get right because it not only requires the right mix, but the right execution because, just like a soufflé, the perfect mix can still fall flat. So how do you get the right mix? And how do you execute it properly?

Let’s step back a bit. For years, consulting companies and project managers said it is all about people, who do the work; process, that people follow; and technology, that people use to execute the process. And they were right. That’s a basic requirement for success in any company. But it’s not enough in today’s supply chains. And there’s two big reasons for that.

First, we’re not in the industrial revolution where economic growth depends on manufacturing which runs on a production line where you need a lot of workers who do well defined, easy to teach tasks. We’re in the knowledge economy where you need educated, innovative, self-reliant growth leaders who can do a wide variety of tasks, dependent on the situation at hand. Warm bodies in seats are not enough anymore — you need talent.

Second, with supply chains global and the participants many and dynamic, processes are no longer static as they were in the late stages of the industrial revolution where one company controlled the goods supply chain end-to-end and processes were well defined and relatively static. Now they are dynamic and have to constantly adapt as parties change, trade routes become temporarily inaccessible, raw materials and components become (temporarily) unavailable, and consumer demands and market availability changes. Static processes are not enough anymore, you need dynamic processes and transition management to manage them.

The only component that hasn’t changed is the technology component, because technology is constantly changing and you still need the most advanced technology, just like you needed during the industrial revolution to keep up with your competition. However, the technology is always in transition and if your technology is too far behind, you may not be able to compete even with the best talent and transition management to throw into the mix.

So we definitely need the right mix of talent, technology, and transition management to succeed — but how do we balance it in our supply chain to make sure the supply chain rocks (because we are the rock stars of the resource revolution)?

The answer is simultaneously ridiculously easy and insanely complex.

Alignment.

Your talent, technology, and transition management game plan must all be aligned.
What does that mean? We’ll tackle that in an upcoming series of Sourcing Innovation white-papers this fall, and offer a few hints over the summer. So, keep your eyes here!