By Ron Gregorsok, VP and CPO North America Indirect Procurement, Luxottica
As a Chief Procurement Officer for a multi-billion dollar global retailer, talent is one of the most powerful assets I can leverage to successfully support the organization. On any given day, my team and I juggle a multitude of projects and initiatives, along with managing important internal and external relationships. This requires a special set of skills and competencies within my team – simply designing an organizational model, assigning roles, and providing occasional training opportunities is not enough to ensure success. No matter how robust my organizational support model is, or how comprehensive my training programs are, the absolute most critical piece of the Procurement talent puzzle is finding the “right person” for each role within the team. In my experience, finding the right candidate to support a complex and highly technical function, someone who is not only capable but highly engaged in the role, is often a balancing act between subject matter expertise and procurement expertise.
Let’s use the IT space as an example since it is one of the most complex and technical areas we support. Here I would consider an SME (Subject Matter Expert) as someone with an education and/or work experience limited to the IT space versus someone with a background in other functions or disciplines. Very few associates are 100 percent SMEs and similarly, very few have nothing but Procurement experience, which lends itself to the model of a talent spectrum quite nicely.
On one end of the talent spectrum is the SME. This is an associate bringing significant IT experience to the table and they are usually coming into Procurement as a developmental move to gain additional experience within the business or perhaps looking for a change in their career path.
In my experience, IT SMEs come up to speed quickly in their new roles within Procurement and are immediately able to “speak the language” of their internal IT customers/partners. They have a distinct advantage over the non-SME associates in their ability to easily understand exactly what they are being asked to source and/or support.
"In my experience, IT SMEs come up to speed quickly in their new roles within Procurement and are immediately able to“speak the language” of their internal IT customers/ partners"
On the flip side, the IT SME that is new to Procurement has a much steeper learning curve. It’s critical for Procurement Leaders to ensure that the new SME has time to learn Procurement processes and strategies upfront to set them up for success in the future. This requires patience and coaching that may not normally be needed at their level. Many SMEs coming from IT have had experience negotiating with suppliers and working with contracts and statements of work, but these are normally done from an IT perspective. Dealing with these areas from a Procurement perspective often can be difficult for the SME as there are usually different expectations around savings and efficiency driven by Procurement rather than IT. Where they may have focused previously on obtaining the best technology and technical solution, they now must focus on the supplier and pricing aspects of the sourcing process much more heavily along with other value drivers that are Procurement-specific. Overall, the SME must learn to shift from being a technology expert to being a sourcing expert.
Looking at the other end of the talent spectrum is the associate bringing a Procurement background to their role supporting IT. This person may be moving from supporting another internal category or new to the company, but either way they possess a strong base of Procurement-specific skills and knowledge.
The Procurement associate has several advantages over their IT SME counterpart. For one, they are likely well-versed in both the terminology, as well as, the basic processes that make up Procurement. While they may not have any more experience in dealing with contracts or negotiations than the IT SME, they have done all of this from the Procurement side of the table and understand how to integrate Procurement goals and objectives with those of their internal customers/partners. This is a critical piece of experience - even though Procurement and IT may have totally different strategies and KPIs, part of Procurement’s responsibility is to seek out, and in some cases, create commonality to drive efficiency in the eyes of both IT and Procurement leadership. For the most part Procurement associates are also used to managing multiple suppliers and in some cases multiple commodity areas which makes them more of a generalist when it comes to supporting the business. They learn to build out their skill set “toolbox” with tools they have acquired through supporting different areas, commodities, suppliers, etc.
The downside to having someone with a Procurement-specific background supporting and organization such as IT is mostly centered around the internal relationship with their customers/partners. Relationships are critical within the Procurement function, so the Procurement associate must possess a true drive to both learn and then understand the IT space they are supporting. As they build competence and confidence in the IT area, they will in turn build credibility with their customers/partners.
Overall, talent from both the SME and Procurement sides of the spectrum bring value to the Procurement-IT relationship. Each can be a valuable addition to a Procurement team when their backgrounds and capabilities are well understood and planned for. The key is for leaders in both Procurement as well as IT to recognize this and understand how to maximize the value that they can bring to both organizations.