Category Management: It’s Déjà Vu All Over Again!!

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They are considered the Holy Grail or at least part of some Trinity when it comes to offering up insights for the future.  I am of course talking about Gartner and their credibility (and their fees) has been earned over time.  It was fascinating and humbling to see what they are stating to be the 2020 trends for Procurement and what we need to do.  All our clients, alumni and readers/followers of our thinking will quickly realize that these are the exact same challenges that we have been discussing for a while but it’s good to get validation from those that speak the gospel truth 😊.  The challenge now is that the rest of the world is catching up to us so let’s make sure we all stay ahead of the curve.  Here are the five recommendations for 2020:

Focus on Value Drivers:  I touched on this in my last blog already including the reference to when we called for the death of Sourcing because of this issue.  The additional point I will raise here is that without rigorous and vigorous “selling” of this change to our immediate leaders, executives and stakeholders, this shift is doomed.  If we continue to be measured solely on the basis of cost savings/risk mitigation, nothing will ever change.  This is a fundamental shift and therefore a significant change management challenge.  This is one challenge (Change Management) Gartner does not and should have specifically mentioned.

Procurement’s Role:  Gartner talks about shifting from a purely transactional/executor role to much more of an advisor role – especially on the more tactical buys/categories.  This is something that we could not agree with more and have been advocating the Advisor role.  What is interesting is that Gartner also addresses the need for a different set of skills for this (Strategic vs. Tactical).

Business Role:  This is an interesting twist that Gartner takes – they define the role of the business as owning more of the tactical buys/categories from above.  This is critical.  The above two shifts cannot be accomplished without a corresponding change in the role of the Stakeholder.  This again is a significant change management challenge and again thankfully they address the need for Procurement to have the competency of Competency Development – now that’s what we would call a Next Practice!!  They also address Adoption as critical to make this shift happen.  Interestingly, we just delivered a set of workshops sponsored by Sourcing where they invited their Stakeholders as well and based on their feedback. They are thinking of delivering more of them. 

Delivery Model:  The new role of the business will require us to extend the COE whose scope has been just the Sourcing Organization to being the entire organization.  For example, providing all the same support (and even more because Sourcing owns the successful shift or transition) to the Business that’s taking over.  Acting as the Portfolio Risk Management function, the new COE must now analyze data from across the organization and get decisions made.  The new COE will have to ensure that the Business has access to the appropriate Governance structure.  Thankfully, Gartner again references the new kind of skills Procurement needs.

Resources:  Gartner first specifically addresses the need for Consulting skills in Sourcing and then the need for appropriate (enhancing customer experience) technology.  Good news: Higher pay!!  Interesting, others have identified these two as well (last blog) and have also identified Strategic Competencies (such as Consulting skills) as more important than the technology.  We must admit that this one continues to be perplexing as the need for Strategic Competencies has been on many such lists over many years and is an investment with the highest return- bar none (according to ALL the research out there) and yet continues to be grossly underfunded, if at all??? 

We have always valued Gartner’s opinions (and they actually advised us for a short while) and continue to do so.  This list is something we should all pay attention to!

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Dalip Raheja
Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.

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