Sourcing talent shortages are on the horizon. Some of your organization’s most strategic intellectual property will soon walk out the door.
Predictions suggest that 200,000 senior procurement positions will open in the US over the next few years. Furthermore, the US Census Bureau predicts more than 60 million baby boomers will leave the workforce by 2025—and only 40 million new individuals will enter.
Will your organization be prepared to fill the talent gaps?
Strategic sourcing as a competitive weapon
Organizations are becoming increasingly aware of how important the chief procurement officer (CPO)’s team is in creating strategic differentiation. As awareness grows and expectations rise, the strategic sourcing professional must push beyond simple rate savings to identify and encourage supplier innovation, internal stakeholder alignment and other value creation scenarios.
The net result is increased demand for talented resources and an imminent reduction in the overall size of the labour pool. A recent IBM CPO Study found that sourcing skill shortages will be the single greatest obstacle to success for organizations.
Organizations can work to eliminate this obstacle by taking a two-pronged approach.
You must consider that in the upcoming years you’ll need to develop much more of your talent in-house. To be efficient in developing skills you will need a skill development infrastructure.
You must also consider that a majority of your sourcing expertise resides as intellectual property in your current senior staffers. Their knowledge is a valuable asset that must be transferred before it is lost.
Building a skills development infrastructure
The first step in building a skill development infrastructure is also the first step in achieving your organization’s sourcing objectives: develop a prioritized pipeline of sourcing initiatives. Using this pipeline, create a list of skills that your organization will need to succeed at each of those sourcing initiatives.
Next, conduct an honest assessment of your team’s skills as you assign your team to the sourcing initiative pipeline. At the conclusion of this activity you will have a prioritized list of skill gaps. Since these skill gaps will correlate directly to sourcing initiatives you’ll have a solid foundation for building a business case for each skill investment.
The final step is to determine how you are going to close those skill gaps. There are many ways to build skills in a staff member. As you assess different options, consider those that leave behind a reusable deliverable. Try to avoid disposable solutions that only work once.
Your goal, year over year, is to incrementally build an infrastructure of tools and deliverables. Using this approach, you’ll find that in each planning cycle, you’ll be investing less in the basic skills and more in advanced sourcing practices and techniques you need to drive competitive differentiation.
Transferring generational knowledge
Structured skill development programs may build new skills, but they do not directly address how to capture the knowledge of your existing staff. So how do you keep your skilled staff focused on the current objectives while capturing as much of their knowledge as possible?
Consider using the following two approaches.
1. Sourcing program management. Most organizations have one or more established sourcing processes; these are often the six to eight major steps of the source to contract cycle. Implement a process or tool that forces each sourcing professional to document their strategy and conclusion for key step of the process. Include information about requirements gathering, market analysis, strategy formulation, awarding logic and supplier performance measurement.
Pair newer staff members with senior team members. Build approval steps into key steps of the process, such as sourcing strategy formulation. Ask the senior member to review the approval requests and provide documented commentary to the junior employee. The resulting repository of commodity specific projects, strategies, conclusions and lessons learned will capture insight and knowledge from your senior staff.
2. Sourcing community management. The majority of the knowledge exchanged in a work environment travels via email, phone and personal interaction. While you should never seek to replace personal interaction and relationship-building, an organization can capture a lot of this interchange using online communities and collaboration tools.
Some of these communities are limited to single organizations while others are much larger.
In each of these networks the senior sourcing professionals serve as visible community leaders. This helps to engage the most critical knowledge contributors and transfer their knowledge to an organizational asset.
Ideally, look to find a solution that allows you to combine sourcing program management and sourcing community management into your skills infrastructure. If your resources can move seamlessly from executing a sourcing process step to accessing their peers to accessing formal training, they are more likely to succeed in achieving their goals.
Whether you are preparing for a pending skills shortage, or you are working to increase the capabilities of your team, sourcing knowledge and skills are critical to success. Each day that passes contains opportunities to capture current knowledge assets and avoid downstream skill building costs.
Take advantage of time! Build new skills to your support your sourcing objectives while leaving behind a growing skill development infrastructure. Capture addition knowledge and experience through sourcing program management and sourcing community management.
John Shaw is the director of education services at BravoSolution, which helps procurement professionals with tools and services to identify sourcing opportunities, prioritize initiatives, execute projects with tailored solutions and realize the benefits of their initiatives.