Tuck Chapman goes on to say: "The 21st century sourcing professional must blend sourcing technical competence — deal structuring, negotiating and innovation — with the skills of a trusted advisor. Active listening is the first step toward sourcing excellence." Tuck Chapman's philosophy is right on target, like the old saying, "God gave us two ears and one mouth for a reason."
In Stephen R. Covey's book, 7 Habits of Highly Effective People, the fifth habit is "Seek First to Understand, Then to Be Understood." According to Covey, "Habit 5 is powerful because it is right in the middle of your circle of influence." Covey adds: "You always seek first to understand. That is something within your control. As you do this, watch what happens to your circle of influence. Because you really listen, you become influenceable." In order to understand the drivers of our internal business partners, we must be clear on their expected end results. (Source: 7 Habits of Highly Effective People, 1989. Simon & Schuster.)
For the mature sourcing organization, the days of "banking savings" from the low-hanging fruit are gone; these activities are now considered tactical. Leading companies are looking to the sourcing organization to assist in the execution and on-going management of complex business process outsourcing relationships, as well as to provide guidance with revenue-generating ventures. The traditional buyer is not equipped to play this role or create this type of value.
So what is the magical DNA of this professional? Now that we understand the role of this valued professional, let's start with the foundation. In the past, the minimum profile would have included being a good manager of status quo and having a working knowledge of the process. Although a plus, being skilled in sourcing concepts is not enough.
Lisa Earp, senior manager, Infrastructure Management Services, for Nike, looks for strong business consulting skills in the sourcing professionals with which she works. According to Earp, who organizationally resides in IT: "The members of our sourcing teams consist of subject matter experts from the lines of business, internal business consultants, sourcing and legal — at a minimum. Although 95 percent of my background is in sourcing, I am not a part of that organization. My focus is on IT supplier management and performance." Earp, who has been at Nike since 1997, concludes: "Nike is a marketing company. Everything we do is with the consumer in mind. Our ability to provide customers with a valuable product is directly tied to how well we manage our supplier relationships. Organizations are being very narrow-minded if they isolate high-level sourcing expertise just to procurement."
As at Nike, these competencies must not be viewed as a commodity, but as a strategic advantage to an organization. The key difference between the traditional procurement associate of the past and the sourcing professional of the future is his or her innate ability to manage relationships and look beyond the single event of a sourcing initiative and manage to the business.
One does not have to look far to understand the business drivers for America's largest organizations. Shareholders are sending a clear message to CEOs: We want strong returns and continued growth in the value of the company. In order to meet this request forward-thinking organizations are embracing this new sourcing professional. The stakes are higher, but the return will also be greater. As reported in A.T. Kearney's AEP survey, "Organizations that have distinguished themselves as leaders in the procurement discipline have exceeded their industry average net income margin in each of the past five years by an average of 59 percent — highlighting the importance of procurement excellence." (Source: "Assessment of Excellence in Procurement." Copyright A.T. Kearney, 2005. All rights reserved. Reprinted with permission.)
The Complete Package
There is a shift occurring in the industry. Ten years ago organizations were clueless when asked how many suppliers they had, much less how much they spent with those suppliers. Today, more and more companies understand the strategic, competitive nature of this kind of information. And as corporate America continues to focus investment dollars on ways of generating revenue, they cannot be blind to the value of this new professional.