For example, a top concern that registered with procurement pros in both Europe and the U.S. was the ability to attract, develop and retain talent needed across the procurement function – both in the present and through any envisioned transformation.
Today’s procurement operations are typically well-oiled machines that integrate human expertise, computers and some degree of automation. But digitization promises a quantum jump in capability and almost guarantees redefinition of many jobs. For example, an employee who is adept at juggling multiple screens showing purchase orders, invoices and delivery records might be entirely replaced by RPA which understands or can learn the thought processes and rules that are at work in that individual’s tasks.
So, for procurement, the digitization process has great promise but also the near certainty that job definitions will change. That’s bound to upset the apple cart – risking the alienation of some workers, turnover or even process disruption. This is a challenge, and it requires leadership and planning. Although there are widely expressed fears in the popular media about digitization – and all kinds of automation – and what it will mean for people, the big picture is positive. Prior waves of change – the application of motor power and machinery to production and the introduction of computers in business – did not produce a net loss of jobs. The jobs changed and, in fact, generally improved.
So, CPOs that are leading the way on digitalization are preparing their organizations to deploy and redeploy talent wisely in the face of this change. To succeed, procurement leaders will need to engage their workforce in the process and, where possible, provide career paths and training that embrace digitalization.
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In fact, human talent is going to be more critical to organizations than ever. Companies must recognize, nurture and reward the people that can provide their competitive differentiation. They must have a talent management strategy to strengthen roles and develop skills and knowledge for cutting-edge performance. To achieve that procurement needs to become better in marketing the benefits the function offers. There is no better place for talent to learn and understand the business model of an organization, get a full overview of a company and its departments to be able to determine a next possible step in their careers.
Of course, a primary element in the digitalization of procurement is getting everyone on board to embrace it – from CPOs to entry level procurement professionals. It’s not just about investing in new technology, it is a culture change and a willingness to embrace new, innovative ways of improving procurement. Smart, forward-looking CPOs know that the time to digitize has arrived, and it will be critical to help procurement become a more strategic part of the business – more than just a cost-savings lever. Those who embrace digital technologies will thrive in the evolving business landscape, while those that don’t will be left in the dust by the competition.