An analytics explosion fast approaches the procurement industry

Professionals working in procurement jobs and procurement recruitment will need to acquire new competencies in the next two years to handle a massive increase in the adoption of advanced analytics technology, a new study predicts.

Research by The Hackett Group forecasts that the utilisation of prescriptive and predictive analytics in procurement – including risk assessment, spend analysis and market intelligence – is poised to explode over the coming two to three years.

The report, Closing the Enterprise Analytics Talent Gap: Building the Essential Skills for Insight-Driven Businesses, found that 79% of procurement executives report that acquiring new capabilities in modelling, analytics and reporting will be either “critically important” or “highly important” over the next 24–36 months. And yet many are fearful that their companies’ existing ability to perform the new generation of complex analysis and reporting simply isn’t up to scratch.

The report identifies six new core competencies procurement professionals will need:

1. Data analysis– extracting, processing and translating complex data into actionable plans.
2. Entrepreneurial savviness– awareness of key business drivers and demands, and an ability to pinpoint problems and develop alternatives.
3. Strategic thinking– anticipating market changes and the company’s forthcoming direction.
4. Relationship management– ability to positively influence line-of-business employees through advanced interpersonal skills (being approachable, open and collaborative).
5. Innovation and creativity– recognising new patterns and creating new categories.
6. Agility– a new comfort in handling shifting priorities and managing ambiguities.

As matters stand, the report finds that demand for these competencies outstrips supply by a wide margin. Companies, the report states, will need to start developing these skills internally as a matter of urgency – a process that will entail a significant overhaul of their training and development programmes.

Non-traditional educational strategies will often need to be employed, including assimilating procurement employees in the business unit for a specified time so that they can observe how it operates and familiarise themselves with the people involved.

Big change, it would appear, is moving rapidly along the procurement industry’s pipeline.

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