Ensuring your procurement team has the optimal blend of procurement training is a challenge. It’s often difficult to balance the right type of content, while also protecting the budget for learning & development (L&D).
In today’s tough economic environment, could technology enable procurement training to be delivered for less cost and more effectively?
To help me answer this question, I turned to fellow podcast host Jonathan O’Brien to help co-author this article.
Jonathan is the CEO of UK-based procurement training company Positive Purchasing. They have been developing SaaS products to productise the knowledge built through 20 years of providing training. Live training courses are still, however, a core part of their business.
We dive into how Jonathan sees the future, and whether technology will replace, or rather enhance, the more traditional training delivery methods.
Does classroom procurement training have a future?
Let’s take a reference point of just before the pandemic, in early 2020. At that time, the majority of training was delivered in-person, in a classroom training environment. There was very little traction even for live, online, instructor-led training. The pandemic made us fast forward 10 years, and immediately everything became delivered online.
Since then, there has been a slow drift back to classroom training. The pendulum swung all the way to remote, and now it’s kind of settled somewhere in the middle. Companies saw the benefits of online, but live, instructor-led training because it was interactive. You don’t get that with self-paced online courses. On top of that, it didn’t require any travel budget.
Is hybrid training really the best of both worlds?
Companies are now starting to see that by not bringing people together in person, they are losing out on those kind of personal connection touch points. So, if teams get together once a year for an annual conference, or for an off-site strategy meeting, then a trend has emerged where they will combine some in-person training into their agenda.
It enables them to maximise the bang for their buck with travel budget, while also deliver the advantages of personal connection.
Is training still the first thing to be cut in a downturn?
Travel budgets certainly haven’t magically re-appeared. But there is a recognition now that investing in bringing people together has a value, in the same way that attending conferences now is as popular as ever. This was perhaps not recognised until Covid forced us into virtual-only networking events for almost two years.
However, with some economic headwinds, the first thing to get cut is training and travel budgets. It’s just the short-term thinking that permeates many large companies. Reacting to the financial pressures of the moment means cutting budgets on anything considered non-essential spend. It’s low hanging fruit for CFOs if they need to show some quick results to cut costs.
The intention is never usually to permanently cut training. It’s a false economy though, because companies have cut back this budget are then impacted in other ways.
A few years down the road, they’re suddenly not managing to do what they need to do. For example, your procurement team is not negotiating well. That’s because your team is not trained in effective supplier negotiations, or they haven’t refreshed their other core procurement skills. So, yes, if your CFO cuts budgets, it will be a successful short-term cost cutting measure. The negative consequences, however, usually only surface over the longer-term.
For the companies who are bucking the trend and who are investing more into procurement training, it tends to be driven by more contemporary topics. For example, driving sustainability, building the right capabilities around digital procurement, developing emotional intelligence and soft skills, and so on. While everybody still needs the basic procurement skills, the overall training picture is much more diverse than it was in the past.
Are self-paced, online procurement courses the answer?
The logical answer to budget cuts and more cost-effective training would be to assume that online procurement training through self-paced courses is the answer. Indeed, Jonathan’s company has developed an L&D portal called Procleus, a fusion of the words “procurement” and “nucleus”.
This is meant to serve the purpose of delivering tailored L&D journeys to each procurement team member. Jonathan firmly believes, however, that just giving employees access to a library of online courses is not the solution.
Instead, he sees a mix of self-paced learning, assessment tools, and apps to help with practical application of training principles. One example is their Ruby app. This is their guided negotiation plan creator, which is ideally used as a practical application of the knowledge from their negotiation training courses.
The best learning and development is blended. It’s tailored to the individual, but it’s also something that the team member is able to work through in the way that suits them. Buying a package of e-learning courses or buying a cumbersome Learning Management System (LMS) can often be counterproductive. When you’re trying to develop a strategic procurement team and teach them things like advanced category management, then cheap, basic level self-paced online courses won’t be effective.
Training and learning has to be relevant to the workplace, to people’s jobs, with coaching with leadership combined in there that’s driving that forward. Governance should also support this, to ensure that any training goals are not siloed from how the organisation actually works. Team members must internalise it and begin to apply it. You’ve got to help them and enable them to apply it in their jobs to make sure they effectively are able to execute what they’ve learned.
Is free, online procurement content a good place to start?
The difference between where we are now vs. where we were 10 to 15 years ago?
Definitely the volume of content available out there for free. If you’re starting from scratch in procurement, you can learn the basics by reading blogs, watching YouTube, listening to podcasts and attending webinars hosted by software companies.
Yes, the topics or answers may be a bit biased towards the content publisher’s view of the world (or what product or service they’re trying to sell).
However, it’s still a great source for anyone who doesn’t work for a company that invests a lot into training. It’s not going to replace an individual, tailored L&D plan. A good HR department or line manager though should be able to work with you to identify the more technical training requirements to close any specific skills gaps.
Getting a solid, basic knowledge of procurement principles from numerous different angles, completely free, is easy to do these days. Even if we go back less than a generation, this was not possible.
Tech in procurement training: an evolution or a revolution?
Procurement leaders today often have a very limited budget to spend on training. At the same time, we are all spoilt for choice by the number of different potential ways of consuming content.
So, where do you invest the little bit of money that you have got into more advanced training? And then, how much can you do asynchronously via platforms, apps and self-learning?
Technology is providing an evolutionary approach, rather than a big bang revolution. It’s enabling self-paced learning, either for free or at a lower cost than classroom training. This can effectively cover the more basic requirements, freeing up budget for more technical training.
Through applications, quizzes, software and interactive learning experiences, it also ensures that procurement professionals can refresh and practice what they’ve learned in a classroom environment. This was harder to do before internet speeds enabled reliable video streaming. Thanks to algorithms and machine learning, you’ve also got opportunities now for virtual role-playing and AI-driven guided support for tasks such as negotiation planning and category strategy creation.
So, part of the challenge for CPOs and their HR business partners is to take a step back and to try to align L&D objectives to the functional objectives of procurement. How do these fit in with the KPIs of the wider business?
This requires a more in-depth assessment. Thankfully, technology can also help to do that. It allows us to assess the individual not just through a simple questionnaire, but by using a number of levers which can test the practical application of capabilities.
So, technology on the whole is an enabler. Before we conclude, however, we have to look at the sexy topic of AI. Where will we see the biggest impact of AI in the L&D space.
Will AI play a role in procurement training?
Jonathan sees AI as an integral part of the equation. It will help to power some of these things we already discussed. We shouldn’t get too hung up on it though. Jonathan predicts that it will just naturally find its place.
One area where AI could really play a role is to assist with the continuous application and practice of what has been taught. This can either be classroom training or through an online course. The tendency is always to blame the training if an organisation doesn’t see improvements in behaviour or aptitude.
AI-driven algorithms or avatars, who become more “intelligent” the further you develop your skills and experience as an individual, could be a great way to ensure continuous improvement and on-the-job training.
The reality is that many companies don’t implement stage reviews after putting their teams through training courses. Unless the organisation drives the governance to support continuous improvement, the ROI on the training is going to be sub-optimal.
By using AI guided tools and avatars, you can help to address this. Your course attendees then remain fresh and can actually apply what they have been taught.
The future is a hybrid mix of traditional, self-paced and AI-driven
In summary, there is a trend to a hybrid approach for training.
There’s a recognition among progressive businesses that sometimes you need to bring people together face-to-face for effective training. We must maximise the value of technology. We do this by making sure that the training is effective. The best way you can do this is to blending online and traditional training methods for the best results.
Learning and development must be engaging. This means mixing formal, structured training courses with AI-driven applications where team members can enhance their capabilities online. We can achieve this through a tailored, individual training approach to enable the best of both worlds.
