With all the disruptions facing supply chains this year, procurement professionals are in the spotlight as crucial business partners driving agility and flexibility in the face of risk and volatility. These increased demands require professionals skilled in data, risk, and supplier relationship management, as well contract negotiation, business ethics, and advising stakeholders. Procurement professionals are being called on to act in a strategic and analytical capacity.

There is a clear shift in purchasing skills and processes to generate value rather than simply buying goods and services. As we prepare to say goodbye to 2020 (thankfully!), this is a good time to revisit the skills that will be critical in future procurement roles. In APQC’s research, we found that the top 10 required skills will be:

This future showcases a combination of soft skills and procurement-specific responsibilities that need to be tightly connected. For most organizations, APQC research found that general business skills and soft skills are in even greater demand than the job-specific skills for the procurement team. As automation removes busy work, there will be more time and need for procurement professionals to engage in work that is cognitively demanding and requires socioemotional intelligence.

It’s not surprising that business ethics tops the list, considering the amount of capital that flows through procurement. Smart procurement organizations are applying strong business ethics to enable their organizational to achieve corporate sustainability and social welfare goals. Consider trust a foundational requirement (that still requires professional training and expectation-setting) upon which stands other desirable procurement skills.

Now is also the time of year when many organizations conduct employee performance reviews and set goals for the new year. To emphasize the importance of attaining future-ready skills, leading organizations tie individual procurement staff performance reviews and incentives to procurement/sourcing performance. Doing so gives procurement professionals “skin in the game” and helps to reinforce a business partner mindset that is continually oriented toward driving value for the organization. APQC finds, though, that only 39 percent of organizations tie reviews and incentives to performance to a very great extent. About half (53 percent) do it to a moderate extent.

When organizations tie performance reviews and incentives to procurement and sourcing performance, they tend to see improvement in several areas. Organizations go all in for this practice:

• see shorter average supplier lead times (17.5 days vs. 30 days),
• place purchase orders faster (24 hours vs 30 hours),
• retain more staff with formal training in negotiations (63 percent vs. 54 percent), and
• achieve a lower total cost for the procurement process group ($299 vs $394 per purchase order).

When tying performance reviews to performance, it’s important to focus on a balanced set of success measures. Rewards based purely on cost, for example, may result in weakened supplier relationships (as buyers attempt to strongarm suppliers for the lowest cost possible) or even unethical decision making (as buyers bend the rules to reach targets), each of which constitutes risk exposure. Focusing on a broad range of success measures—and rewarding procurement professionals who embody them through concrete skills—helps ensure that procurement can be the savvy and ethical business partner that organizations need to drive better results while avoiding risk.

To learn more about these skills needed for the future, check out APQC's report Identifying and Developing the Future Skills Needed in Sourcing and Procurement. We conducted this research in collaboration with the University of Tennessee and subject matter experts Kate Vitasek, Bonnie Keith, and Emmanuel Cambresy. Click here for an executive summary of the report.

Also stay tuned for an all-new Procurement: Blueprint for Success coming soon from APQC. It will include 16 performance drivers in the categories of procurement strategy and culture, supplier relationships and risk, processes, technology, and measurement.

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