The 8 Modules, 31 Focus Points and 5 Collaboration Phases of the SEIC Methodology provide a path to success

View

Our Diagnostic Tool provides a gap analysis of SEI capability to support the strategic planning process

View

In-depth explorations of the approaches and techniques used by leading organizations in the field of SEI today

View

Thought leadership and insightful articles on the most important issues for companies pursuing an SEI agenda

View

Insight calls are available to join for all members of the SEIC and will be addressing a number of topics

View

Useful downloads, from unique research to practical templates, frameworks and tools being used by SEI leaders

View

The 11 modules of the SEI methodology focus on the key processes that enable the successful rollout of SEI

View

Our Capabilities Assessment tools provide the means for organizations to gain insight into their own SEI approach

View

In-depth explorations of the approaches and techniques used by leading organizations in the field of SEI today

View

Thought leadership and insightful articles on the most important issues for companies pursuing an SEI agenda

View

Useful downloads, from unique research to practical templates, frameworks and tools being used by SEI leaders

View

Is innovation the cause or antidote to procurement job erosion?

While innovative technologies will almost certainly replace a range of job roles in procurement, the function can remain an active employer by transforming and investing in new skills

Innovation and employment

“Does procurement have a future as a job creator?”

 

This question formed the basis of several discussions during both the SEIC’s first Accelerator Program in 2017, and last week’s World Procurement Congress.

 

The negative impact that new technologies might have on the labour market is widely recognized across a range of industries. McKinsey estimates, for example, that approximately half of all activities that humans are employed to do could be replaced by automation alone.

 

When put to those companies that attended our Accelerator Program that, if pursued to their full potential, such technologies might significantly erode the procurement jobs market, the consensus was that they could – but with an important caveat. Procurement professionals can survive if they adapt and transform.

 

It’s a view that lies at the heart of the SEIC’s raison d’être – that procurement does have a long-term future, but, to ensure it, must move beyond traditional deliverables (price, quality, on-time delivery, and so on) and transition into a value driver and generator across the business. Embracing Supplier-Enabled Innovation, and investing in the skills and capabilities needed to facilitate it, is a key means of achieving this transformation.

 

Five to 10 years was the window that SEIC members set for procurement to make this change. The breakneck pace of technology advances, they said, is such that failing to develop within this timeframe will result in the function becoming irrelevant and, by extension, widespread job losses.

 

The technologies they refer to not only include those that can outperform humans in routine physical tasks; they are also increasingly capable of conducting more advanced cognitive tasks, such as strategic thinking and reasoning.

 

But this, importantly, is only one side of the technology coin. Disruptive innovations such as these do have the potential to be destructive, but they equally have the potential to be creative.

 

Last year, a report from EY found that disruptive entrepreneurs – those that have altered “some or all the rules of their sector” – are 58% more likely to increase their overall workforce compared to those that haven’t. Across its entire sample of entrepreneurs, 59% reported plans to increase their global workforce in 2016 compared to 47% in 2015 – a 25% increase year-on-year.

 

We’ve seen similar results in the SEIC. While acknowledging that a portion of their staff will be lost to new technologies over the coming years, our member companies will simultaneously create jobs that take advantage of new capabilities. For these companies, investing in new skills and managing talent is at the top of their priority list.

 

Automotive supplier Brose, for instance, has been hiring and training staff with expertise in technology and product development – something that it wasn’t doing as recently as five years ago. “Crunching numbers and old school bargaining, on their own, are not good enough anymore,” said CPO Sandro Scharlibbe. “While they remain relevant, they need to be expanded upon.”

 

Similarly, at the first day of Procurement Leaders’ World Procurement Congress last week, Siemens talked at length about the importance of keeping people employed in the function. “Jobs will definitely be lost to digitization and artificial intelligence, among others,” said CPO Klaus Staubitzer. “But, if we transform, we needn’t lose people.”

 

The key takeaway here, then, is not that we should try to halt the advance of new technologies to mitigate their impact on employment; doing so would be futile. Rather, we must develop procurement – and, indeed, other business functions – in such a way that people remain an indispensable part of its growth.

 

Those that recognize this and make the appropriate investments in skills will still lose job roles – but, crucially, they’ll also create new ones.

 

Samuel Wrest

Powered by:

Procurement Leaders Logo

© Sigaria Ltd and its contributors. All rights reserved. www.sigaria.com
Sigaria accepts no responsibility for advice or information contained on this site although every effort is made to ensure its accuracy. Users are advised to seek independent advice from qualified persons before acting upon any such information.