In late 2020, a Chief Procurement Officer at a Fortune 100 company sat down for her first-ever meeting with the CEO. His opening question: “What does procurement do again?”
That moment encapsulates the lack of organizational knowledge that has long left procurement leaders invisible — that is, until the pandemic hit and CEOs suddenly needed people who could navigate supply chain chaos and make strategic decisions at crisis speed.
“The skill set inherent in the function was needed to overcome the crisis,” explains Etosha Thurman, Chief Marketing Officer for Finance and Spend Management at SAP. “Procurement leaders suddenly became exposed, at a greater level, to the C-suite.”
Thurman knows the function from the inside, having started her career as an actuary recruited into procurement by P&G. That mathematician’s training—the ability to think systemically and assess context—has turned out to be exactly what modern procurement needs.
In this conversation with ASUG, conducted at the recent SAP Connect conference in Las Vegas, Thurman reflects on SAP’s latest procurement innovations, from AI-powered sourcing assistants to the persona-focused SAP Ariba Launchpad and SAP Business Data Cloud — and why these tools must be paired with a new breed of procurement professional.
This interview has been edited and condensed.
Q: When you think about procurement’s evolving place in the intelligent enterprise, what factors have played a part in this function taking on such an outsized role?
Let’s think about why procurement exists. It comes about in a couple of ways. We’re a company, we’re growing, we’re spending money. Everything’s great until we get to a certain scale, and we’ve got to think about profits and margin.
Cost management is always going to be part of why procurement departments exist. It’s the foundation. The other piece is managing supplier relationships so we can favorable differentiate with good prices and preferred service. To do that well, you need commercial skills and influence skills. You need the ability to understand the supplier’s business dynamics. Then you have the piece of how to strategically influence the business; because supply chain colleagues or store /branch operations may not use my key suppliers if I can’t show benefit, if I can’t show strategic impact.
What happened in the ’90s and 2000s? A surge of organizational transformation with technology. Which brought increased stability. Just-in-time supply chain processes were introduced. I now have this level of transparency with my supplier community that creates a very stable structure. My main focus is on driving costs downward because everything else is pretty stable.
Then the pandemic hits, and we’re in crisis. In a crisis, you start looking for the skills to manage influence, strategic decision-making, and relationships. The crisis was around supply availability: labor, goods, and services. In this crisis situation, the value of procurement becomes abundantly clear..
In my opinion, the pandemic exposed CEOs to a hidden gem — their procurement team, an organization they were only thinking of as back office suddenly becomes critical to surviving this crisis. For leaders running their procurement organizations commercially, they got a seat at the table: “Let’s look at our entire landscape. I’m bringing forward resources that understand supply chain and global dynamics and can influence and negotiate. I’m going to apply them to other problems that involve my supplier community, compliance, and goals like diverse supply.”
Despite having more visibility in their companies, they’re not a function in which companies heavily invest. Most have less than 1% of the company budget. Yet, expectations to grow procurement’s influence and impact, particularly around cost management, abound.
The other thing that’s super interesting is supplier innovation as a path to top-line growth. I’m seeing that rise as an expectation: manage costs, help us get to sustainability targets, put supplies strategically in the geographies — but how are you looking at bringing us innovation from the supplier community? I’m seeing a resurgence of that question.
Q: Given organizations’ historical underinvestment in procurement, and that expanded remit you’re seeing, how have the requirements and ideal persona of a procurement professional changed? How does one even begin to hire for something that has become so foundational but is so underinvested?
It’s not easy, and it’s the number one area procurement leaders are worried about—talent—for two reasons.
One, it’s not a sexy career. I didn’t go to school for procurement. I went to school to be an actuary and got recruited by P&G. They had to send me an article to tell me what the function was. Nobody goes to school for procurement. Younger talent isn’t coming into supply chain and procurement at the rate that’s needed.
Two, there’s this workforce that was sourcing focused. That’s what procurement became because we were so stable. Now I need you to understand geopolitics. I need you to understand carbon footprint. I need you to consider multiple success outcomes, not just cost reduction.
I’ll give you a great example. Do you know in the U.S. what one of the top crops is that we export? Soybeans. Do you know who buys 40% of our soybean crop? China. Do you know who we’re in a tariff war with? China. September is the month that they order their soybeans. Guess what they did? Nothing.
Typically, China buys 25% of our soybean output — this year, zero Chinese orders. You now have all these U.S. soybean farmers with no orders for their crop. China placed orders with farmers in Brazil. If I were the leader of a Japanese food manufacturer, I would expect my procurement team to be putting up an RFP, because there’s a lot of inventory out there, and we can get great prices. This is an example of the intellect and the type of context procurement professionals need today and in the future. An on-your-feet sort of approach.
Three years ago, I met with about 40 CPOs (chief procurement officers). This is before ChatGPT 3.0. I said, “What is the profile of your future procurement person?” They were saying, “We’re going to hire data scientists. We need people to understand data better because we’re learning about carbon footprint and all of this.”
Then ChatGPT 3.0 came out. I had the same conversation this summer. Now, none of it is about data. One person in a whole room raised their hand, saying they want somebody with data science skills. Why? SAP is going to bring that to you. You need someone who can tell you: does this data make sense in the context of the region you’re in, the region your customers are in, the weather, climate change, political impact, competitive impact?
The rise of soft skills in procurement is significant: the ability to influence, set strategy, and manage stakeholders. They’re always going to be responsible for cost and also helping with sustainability and securing supply. That means understanding why it’s a big deal when China doesn’t buy soybeans and what that means for our business.
You’re going to have to hire people who are intellectually curious, intellectually agile, relationship people who can build and manage relationships internally and externally, and who can take data and, instead of analyzing it, draw context, get a recommendation from AI, and assess it contextually to move the business forward.
When I came in, the degree most in demand for procurement was industrial engineering because it was analytical and well-rounded. I think you’re going to see a move more toward someone who has that intellectual horsepower and who can think systemically but in different contexts.
Q: AI proficiency keeps appearing as a top skill in research, but as SAP’s approach with the Business Suite shows, it requires deep competence with structured data and processes first. How do you balance setting that foundation with the C-suite’s appetite for AI?
I’m a mathematician by education, so I’m thinking about this mathematically. The question I ask myself: Do I think there will be a time when AI gets so smart that it doesn’t need any context from a human?
It’s hard for me to accept that. Because who would have predicted the pandemic? How does AI predict something that’s never happened before? How does it respond to an event with little precedent. It’s hard for me to see where you wouldn’t need someone who could understand how this impacts us right here, right now.
Now, if you think about finance, I think there’s a lot further AI could go because it is rule-based. But when you think about procurement, especially category management, there are guidelines and rules you follow, but it is also contextual when you decide to issue an RFP or run a sourcing event.
I tell my children: you have to accept and embrace AI as your assistant, your co-worker, your co-student, because it gives you more leverage. But your job is to understand the context in which you’re interacting with it and be sure it’s making sense within the context.
Procurement needs AI because they’re not getting more investment. The remit has expanded, and no one got new headcount. They need AI to give them the capability and the capacity to react at the speed of business.
Our job at SAP is to give them as much capacity back and help with as much strategic decision-making as we can. It’s their job to have the talent that can take what we deliver and ensure it makes sense for their corporate and social strategies.
Q: Within this context of the changing role and scope of procurement, what are some of the SAP announcements you’re most excited about following SAP Connect?
Let me talk macro. There are several things I’m super excited about. Some are my personal issues, and some are because of my understanding of customer needs.
Let me tell you my personal issues. I told you I was an actuary. As much as I am a face of marketing, I’m a math person at the core. Where we’re going with data and harmonizing data across the enterprise is fascinating to me.
When I was in procurement at P&G, procurement rolled up to supply chain. Some things that were super frustrating: trying to get accurate customer forecast data married to manufacturing cycles so I could get good supplier volume forecasts in my contracts and negotiate volume discounts. That’s millions of dollars that I could be giving up by getting that wrong.
When I think about Business Data Cloud and how we’re bringing data across the enterprise together and what AI is going to be able to do on top of that, it is mind-blowing. Here you have HR data in SAP SuccessFactors, and you can take patterns of the key skills we’ve been looking for, our hiring success against it, and then understanding that, look into your contingent workforce within SAP Fieldglass, and do skills matching and even predicting which skills you need to contract to achieve the full workforce skillset you are seeking.
The other thing I’m super excited about is our focus on personas in an enterprise. We’re really shifting away from thinking at a solution level and really thinking about the customer problem statement at a persona level. You will see us talking about the Category Strategy Assistant, considering how can we give the category manager 10%-15% of time back in their day. Time to focus on strategic thinking and higher level work.
You’ll hear us talking about the Sourcing Assistant that can analyze bids and create the sourcing event — completely populating it, taking a peek at your category strategy and putting in your goals, and then analyzing bids. As a former category manager, I spent a lot of time analyzing bids, and suppliers never gave me the response data the way I asked for it. I’m super excited to have a solution that standardizes what I’m getting and gives me award recommendations.
Across SAP and particularly in my areas of finance and spend, we are creating those AI assistants that have a workforce of agents to give time back, increase insights, and help speed up decision velocity in companies.
If I come back to the procurement side, one of the things we hear is you’ve got to make the user experience better. SAP Ariba and SAP are known for breadth. There’s nothing I can’t do within your solutions, but doing it with ease? Maybe we could work on that. I’m really excited about the SAP Ariba Launchpad. Here’s the coolest part: it’s persona-sensitive. If your profile says you are a buyer as opposed to a category manager, the types of recommendations and priorities of tasks will be different. It’s contextual to help you prioritize what needs to be done. I’m excited to bring this to market for our customers to help bring greater efficiency and a more delightful user experience.
Q: It feels like the agent embrace has been galvanizing for folks within SAP. What if we could give a smart assistant to each person in the organization? What have the last few months been like for your teams?
I would tell you it’s evolved. Like every other company, when we first started, it was: build every use case you can think of. They were totally disparate because it was like, “Wow, I can do so many things.”
But in the last several months, we’ve been thinking: it’s great to have all these things, but so what? If my customer can’t point to where it’s giving them time back, where it’s giving them insights that make them smart in front of their stakeholders, that help them make better decisions, what does it matter? That changed the conversation. Instead of focusing on quantity, we are solidly focused on customer impact.
The other thing: every tech company came up with their list of AI use cases two years ago. What happened to the customer? When I went to the World Procurement Congress in May, we had an AI workshop. The procurement professionals there said, “We’re doing one use case this year. That’s it.” Why? “Because it’s overwhelming.” That’s the problem. You’re overwhelming them with all these use cases. The reaction was: slow down, do less, as opposed to do more.
Change is scary, and the number one reason technology projects fail is a lack of change management ultimately leading to a lack of adoption. But if I give you an assistant and you can talk to the assistant, type a note to the assistant, it’s an easy part of your every day, what does it matter what the agents are doing in the background? As long as you are getting to the outcomes you need.
This approach brings us closer to the customer, and that is exciting. Our marketing and product teams can see the relevance and the customer excitement, which gives us all a sense of purpose and fulfillment.