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Sourcing and Procurement

Is Automation gobbling up jobs or creating skilled opportunities in procurement?

With automation becoming the prime focus of organizations, a wave of concern has sparked among employees about machines taking up their roles and subsequent job losses.

As per a study by PwC Analysis after collecting data from 29 countries, up to 30% of all jobs in 60% of the occupations, could be automated by 2030. This shift is often perceived as a threat by the employed.

Procurement leaders must factor in this concern with careful deliberation and understanding while recognizing the inevitable impact the advent of automation could have on employment. It is important for procurement leaders to plan human resourcing to tackle the challenges of a competitive market, and this article will explore both sides of the dilemma.

Automation has already touched several points in the procurement industry. In downstream, including PO (purchase order) compliance, conversion of PO without human involvement, creation of PO catalogues and likewise are valid subjects for automation. On the upstream, automation has helped the complex function of creating and approving RFPs within a stipulated time. On the supplier side, rule-based automation algorithms have eased the process of invoicing, made payments more touchless, and reduced the need for intense manual intervention.

The Human Angle

With technology becoming the centre, existing roles in procurement are bound to change. But even though procurement has several potential areas for automation, especially at the entry level, there are certain niche skills, such as negotiation skills that cannot be solely managed by AI intervention or any tools, and continue to be driven by human intelligence.

Amidst this, it has become essential for procurement to rebrand itself and take the first step towards new world order. This can involve reassessing roles and job descriptions within procurement functions and streamlining overall processes to restructure and create relevant roles.

Already, as procurement companies strive to offer a customer-focused experience, job roles now demand skills such as design thinking, process engineering, complex vendor management, and fluency in technology architectures, thereby opening a series of opportunities for new talent excelling in these areas.

Typically, the journey of a procurement professional starts as a PO processing executive and gradually evolves into roles to that of Category Buyer, Category Lead/Manager, Supplier Relationship Manager, Procurement Manager, CPO, and so on. Each promotion is built on the knowledge and performance of the previous role. Although there is a slight disruption in this cycle with the reduction/elimination of human presence in the entry-level jobs,  there is an increased focus on incorporating managerial, as well as, analytically-centred resources in the field of procurement.

The Best of Both Worlds

It can be inferred that going forward, procurement must be a work of both the left and the right brain – implying a perfectly struck balance between automation and human labour – oscillating between competition and collaboration. While the functions of the left brain, such as logical thinking, analysis, precision, process harmonizing, detail orientation, and sequential processing can be automated, the right-brain skills, such as creativity, generalization, imagination, conceptualization, big-picture thinking, and so on, can only be brought to the table by individuals. Therefore, while automation can take over analytics and artificial intelligence, human-based interaction tasks such as vendor management, resolving unique and undefined complications will continue to require professionals.

Therefore, while recruiting for the vacant positions, procurement administrators are increasingly becoming conscious of choosing the skilled talent that is aligned with the new-age workplace demands that go beyond technical know-how to the new set of roles that digital transformation and hyper-automation have opened.

Moreover, with COVID introducing the hybrid mode of working, the co-existence of machines and humans has become unavoidable. The symbiosis between these two has helped businesses to overcome the effects of a crippling global pandemic. In the future, the newly introduced hybrid model will help companies access a larger pool of resources, ease salary pressures and provide a more productive labour force. Meanwhile, it would enable job seekers to apply and acquire jobs that were otherwise unapproachable due to time and place constraints.

Therefore, it would be accurate to say that while automation might eliminate task-based jobs, there is an emerging demand for skill-based jobs. As AI-powered automation takes the procurement world by storm today’s procurement leaders must sit up and rethink their hiring strategies to acquire an edge in a highly competitive labour market.