Procurement: The Power Centres
The prominence of Procurement as an enterprise function has grown gradually over the last 2 decades with specific focus over the last decade. With enterprises increasingly making choices of “Make vs Buy” and “Recruit vs Staffing” and “Insource vs Outsource” as strategic directions rather than for tactical advantages, the need for and role of Procurement professionals has been on the rise. With wider and deeper consumption of 3rd party services, the need to draw efficiencies with each purchase decision has been the drive for larger pool of mature procurement professionals. From the erstwhile association to core purchasing activities, the association has evolved into higher value functions like research, evaluation, selection and negotiation. From purchase of stock and material for the supply chain, the scope now involves defining service requirements, evaluating SOPs and SLAs, risk management, sustainability and quality of services purchased.
India currently has an estimated 440,000 white collar Procurement Professionals across different levels and industries. Notably the Procurement domain has a higher percentage of senior and experienced professionals with over 37% in the 12+ years of experience range. However it needs to be noted that higher experience levels do not necessarily mean a higher level in the organisation hierarchy. Less than 7% of the professionals are currently in roles equivalent to and above VP and Director levels. 51% operate in the Managerial and Senior Procurement positions. Purchasing as a subset of the Procurement function takes up close to 30% of the procurement professionals, while the remaining 70% are into operations and leadership roles.
21% of procurement professionals are engaged with large enterprises that have headcounts over 10,000. With another sizable 11% engaged with companies in the 5000+ size, the presence and prominence of Procurement professionals is notable in large enterprises.
The top 5 industries that engage senior procurement professionals are IT & ITES, Logistics & Supply Chain, Automotive, Electronic & Electrical Manufacturing and Mechanical / Industrial Engineering. These 5 industries take up over 30% of the total count of procurement professionals.
Currently there are over 17000 white collar job openings for procurement professionals with 12000 of them in the Top 5 procurement hot seats of Bangalore, NCR, Mumbai, Hyderabad and Pune. With over 240 openings for salary ranges above 40Lakhs, 350 in 30L to 40L range and over 1100 in the 20L to 30L range, the financial rewards are handsome for procurement professionals with mid to senior level openings. Procurement Heads with large enterprises add up to an average of 80Lakhs+ in annual compensation.
The overall average experience of Senior Procurement Professionals stands at 20.5 years with an average of 5 career moves in the same period. 15% of Senior Professionals have clocked 10 years and above in their current employment. Senior Professionals are also a dynamic lot that does not shy away industry shifts and relocations for employment. On the qualification front, a mix of technical and business qualifications have set these senior professionals ahead of their peers. The pedigree effect of qualification from premier institutions is not as prominent as in some of the other functional positions.
Emergence of Procurement Professionals as power centers is visible from the ticket size of purchase decisions that they either influence or sign-off. Procurement function is seen either directly influencing or deciding on 45% – 60% of total enterprise spend. Irrespective of size of enterprise, such wide circles of influence definitely makes Procurement a prominent Power Center in enterprises today.