Restaurants Still Need Human Capital As eProcurement Gets Technical

In a report that suggests technology can’t solve every back-office issue, eProcurement service provider Proactis has found that the restaurant industry is struggling to gain access to the right talent pool to optimize its procurement operations.

In a new report released this week, Proactis found that for the restaurant, grocery and retail industries across North America, there are a few hurdles that industry professionals acknowledge when it comes to boosting procurement and overall company performance.

Most common is the adoption and implementation of new technology, a challenge cited by 44 percent of the 130 procurement executives surveyed by Proactis for its report. But nearly the same amount (41 percent) said they struggle to fill gaps left by a lack of procurement expertise among professionals. Nearly a third said they have limited staff capacity, further signaling a gap in human capital availability.

“To gain a competitive advantage and generate sustainable business value, procurement teams need a holistic sourcing approach that combines the right balance of technology and skilled people and resources,” said Brian Miller, Proactis’ vice president of services, in a statement announcing the survey’s results. “Building an in-house team to cover the experience and expertise necessary in today’s complex procurement environment is no easy task.”

In its Restaurant Market Report, Proactis further highlighted this struggle.

While the food services market, the company explained, has certainly experienced an evolution thanks to digitization across both the front and back office, the industry’s procurement function is struggling to not only follow suit, but gain the efficiencies necessary from that shift.

According to researchers, though the restaurant sector may be implementing automated eProcurement solutions, a lack of skills and expertise could be holding them back from realizing the full potential of those tools.

“This challenge especially rings true for restaurant chains which are known for having notoriously small sourcing and procurement teams,” the report stated. “These organizations should consider prioritizing partners that offer a robust combination of full-service expertise and highly configurable software to transform performance.”

Performance is critical to the industry’s procurement teams, too.

According to Proactis, 72 percent of these professionals said cost savings are a top criteria for demonstrating eProcurement success. More than half cited time savings for procurement staff and improved processes and procedures, and half pointed to improved service levels as a key criteria.

But human capital is essential to making these criteria a reality. Researchers found that more than half of survey respondents said data and analytical skills are most in-demand for their firm’s procurement teams. Supplier relation skills, category expertise, financial skills, negotiation skills and innovation and collaborative skills are also in high demand in the food services sector.

Unfortunately, with 41 percent reporting a gap in access to these skills, the restaurant industry’s procurement function is facing a major challenge, Proactis said.

“This isn’t new – finding the right talent has been a constant challenge for procurement leaders over the years,” noted the report.

Most procurement teams have stayed more or less the same size in the last three years despite rising demand for specialized skills. According to Proactis, that’s because many restaurant firms’ procurement teams are turning to external, third-party providers for support. This is part of the industry’s effort to not only improve procurement and boost access to expertise, but to reduce the amount of friction associated with the technical development and evolution of the procurement function.

“The ability to quickly add resources, skills and expertise and enhance the ROI of procurement technologies  without making long-term commitments and radically changing processes – has become a major requirement for procurement leaders,” Proactis concluded of the restaurant sector.

In his statement, Miller emphasized the importance of people in this process.

“Technology is imperative for procurement success,” he said, “but teams need both experienced people and solid processes in place to complement and extract the full value out of the tools they use.”