April 2019

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The Next-Generation Talent Profile:
How Will You Fill the Digital Skills Gap?
By Angela Caswell-LaPierre, Erik Dorr and Tony DiRomualdo

Executive Summary
To realize the significant performance improvement benefits of digital transformation, procurement functions
will need to transform their workforce into one with skills in areas such as data and technology savviness, social
media, smart automation, business acumen, strategic thinking, process excellence, customer service, relationship
management, creativity and innovation, and change orientation. In the face of a significant global talent crunch
(see sidebar, “A growing talent deficit is looming”), organizations cannot rely primarily on acquiring these new skills.
They must also invest in reskilling existing staff, equipping them to handle new responsibilities such as working in
agile ways, programming robots and managing a virtual workforce, integrating and analyzing data, and measuring and
improving processes.

The growing impact of digital transformation on talent – and vice versa

Digital transformation has had a profound influence on enterprise priorities. In fact, 85%
of business services executives – finance, human resources (HR), information technology
(IT), procurement and global business services (GBS) – surveyed in The Hackett Group’s
2019 Key Issues Study said that digital transformation strategies are “high” or “critical”
priorities this year (Fig. 1). Additionally, data and analytics, customer-centricity and
innovation are important enterprise objectives that have a direct impact on functional
development priorities for business services, with talent at the top of the list.

FIG. 1 Top enterprise business objectives and functional development priorities

Business objectives Functional development priorities

Enterprise data Align skills/talent with

37% 50% 87% 24% 59% 83%
and analytics* business needs

Improve functional
26% 48% 74%
analytical capabilities
Enterprise digital
42% 43% 85%
transformation* Improve function
18% 55% 73%
agility

Enterprise Measure/manage
30% 37% 67% 17% 53% 70%
customer-centricity* performance and value

Improve function
18% 48% 66%
customer-centricity
Enterprise
25% 37% 62%
innovation* Optimize resources placement
18% 45% 63%
(BU, corporate, GBS, CoE)

*Strategy objectives and initiatives

CRITICAL HIGH
Source: Key Issues Study, The Hackett Group, 2019

© 2019 The Hackett Group, Inc. All Rights Reserved. The Next-Generation Talent Profile I The Hackett Group I 1
A growing talent deficit
is looming
Research by The Hackett Group
indicates dramatic changes in the
nature of work are imminent as a
result of rapid maturing and adoption
of so called “smart automation”
technologies. Tens of millions of
enterprise roles, including millions
in business service functions, will
be affected, as rules-based, routine
work and basic cognitive tasks are
automated, and knowledge work
is transformed through augmented
intelligence. Research by the
World Economic Forum1 suggests
this transition will require an
unprecedented level of reskilling and
upskilling of employees – 54% –
by 2022.
1
World Economic Forum. “The Future of Jobs
Report 2018.”
© 2019 The Hackett Group, Inc. All Rights Reserved.
While talent is a top functional priority, it is also a major concern for business services
leaders. In this latest annual study, 39% of executives ranked access to critical talent as
a “high risk” to digital transformation. Furthermore, talent is projected to be the fastest-
growing risk factor over the next one to two years.
At the same time, business services leaders believe the increased focus on digital
transformation, data and analytics, customer-centricity, innovation and other enterprise
priorities will have increasingly significant workforce implications. Across all functions,
56% of executives polled in the 2019 Key Issues Study agreed that digital transformation
has a “high” or “very high” impact on the overall talent and leadership needs of the
business today. Even more – 81% – expect that will be the case within two to three
years, as workforces adjust to increasingly digital operations (see sidebar, “Executives
expect technology adoption to accelerate”).
In the study, we also asked executives about the degree to which they believe digital
transformation has an impact on functional roles, skills profiles, and needs today and
also in the next two to three years. While just 32% of procurement executives believe
there is a high impact today, more than half – 56% – believe that will be the case in
two to three years (Fig. 2). Procurement teams will shape and navigate tremendous
change as roles that involve primarily transactional work are automated through digital
transformation and evolve to incorporate more emphasis on knowledge-based and
analytical work.
FIG. 2 Impact of digital transformation on procurement roles, skills profiles and needs;
current and 2-3 years
56%
32%
Current 2-3 years
Source: Key Issues Study, The Hackett Group, 2019
From these findings, it is apparent that the concepts of digital transformation and talent
management are becoming increasingly intertwined. Over the next two to three years,
each will become more critical to driving the effectiveness and impact of the other,
not to mention the business function’s ability to deliver on enterprise expectations and
objectives – an area of growing concern. Sixty percent of procurement executives expect
digital transformation to have a high or very high impact on their function’s attainment
of enterprise objectives over the next two to three years – nearly double the percentage
who believe it has a high impact today.
FIG. 3 Impact of digital transformation on procurement’s attainment of enterprise objectives;
current and 2-3 years
60%
32% 32%
Current 2-3 years
Source: Key Issues Study, The Hackett Group, 2019
The Next-Generation Talent Profile I The Hackett Group I 2
 Executives expect technology
adoption to accelerate

In The Hackett Group’s 2019 Key Issues Study, executives said they anticipate
enterprisewide adoption of core digital platforms, data technologies and emerging
technologies to be significantly higher in a year or two than it is today (Fig. A). For
example, procurement executives expect significantly higher broad-based adoption
of robotic process automation (5.7 times), advanced analytics (3.5 times) and
data visualization (3.2 times) in one to two years than they have today. They also
expect merging technologies, such as cognitive computing/artificial intelligence and
conversational interfaces, to have similar growth patterns, albeit from a lower
current base.

FIG. A Current and projected level of emerging technology adoption in procurement

78% 78% 75% 73%

70% 70%
17% 15% 62% 62%
29% 59% 19% 9%
55%
50% 47%
36% 23%
42% 32% 41%
30% 42% 32%
31%
61% 40% 30% 60% 61%
54% 21% 29% 21% 30%
49% 20%
25% 34% 39%
25% 15% 30% 19%
17% 17% 12% 13%
6% 10% 6% 2% 11%
Current 1-2 Current 1-2 Current 1-2 Current 1-2 Current 1-2 Current 1-2 Current 1-2 Current 1-2 Current 1-2
Years Years Years Years Years Years Years Years Years
Cloud-based Robotic Master data Advanced Data Virtual Social media/ Modernized Cognitive
applications/ process management analytics visualization assistants/ collaboration core ERP computing/
SaaS automation technologies tools chatbots platform artificial
intelligence

BROAD-BASED ADOPTION LIMITED ADOPTION

Source: Key Issues Study, The Hackett Group, 2019

© 2019 The Hackett Group, Inc. All Rights Reserved. The Next-Generation Talent Profile I The Hackett Group I 3
 A new talent profile
As digital transformation automates tasks and enables new possibilities, tomorrow’s
business services employees will perform dramatically different activities within their
functions and across cross-functional and self-directed work teams. They will partner
with the business, model data and analytics to predict and trend business performance,
and redefine the digital architecture to build stronger capabilities within their function and
across the enterprise. They will become problem solvers, develop agile ways of working,
and identify and deliver on continuous innovation and new performance improvements.

This is not just a matter of adding new roles such as data scientists, scrum masters,
process automation specialists, service and solutions designers, and people and
culture specialists. Organizations will also need to change and upskill roles affected
by automation as digital transformation progresses. For example, they may need to
retrain data entry clerks so that they aren’t just equipped to enter data but also to
understand it, spot trends and make business recommendations based on what they
see. Management roles will also change as more virtual workforce models evolve. And
while automation will eliminate significant amounts of time spent on transactional tasks,
it will also create new responsibilities such as “retraining” robots when the organization
introduces new policies and procedures, managing digital service delivery platforms and
monitoring a virtual workforce.

While technology savviness is certainly critical as the adoption of digital platforms

advances, most of the core skills of a digitally enabled workforce are not necessarily
digital in nature. In fact, these roles require advanced skills and competencies such as
business acumen, process excellence, relationship management, agility, creativity and
innovation to equip teams to collaborate and partner with the business and influence
decisions (Fig. 4).

Further, staff at all levels and in all roles will need a more strategic mindset and must be
comfortable working and telling a story with data – that is, turning data into competitive
intelligence and insights rather than just reporting the news. These skills are missing in
many business functions today, but they are essential as work pivots to activities around
process improvement, service design, customer focus and transformation management.

What’s notable about this skill set is that some of these competencies may be
transferable to other roles. By developing these skills, an organization is creating a more
agile workforce that is able to shift easily among roles, special task teams, and functions
or even into the business as the company transforms and evolves itself.

FIG. 4 The skills and competencies of a digitally enabled workforce

Business acumen Agility and change orientation

• Understands key business drivers, • Welcomes change and is
business process engineering and comfortable with shifting
lean process management priorities
• Possesses knowledge of factors, • Deals effectively with ambiguity
priorities and business demands
• Identifies problems and prioritizes
alternatives Creativity and innovation
• Creates diverse and novel ideas
or novel combinations of ideas
Data savviness • Creates and recognizes new
• Processes data and extracts patterns/categories
relevant information • Exhibits curiosity and broad
• Possesses knowledge of interests
analytical tools and methodologies • Accepts constructive criticism
• Translates analyses into
actionable plans
Relationship management
• Demonstrates advanced
Strategic mindset interpersonal skills; high social
• Develops strategic frameworks and emotional intelligence
and visions • Influences decisions
• Anticipates market changes • Is open, approachable and
• Addresses challenges and outlines collaborative
future direction

© 2019 The Hackett Group, Inc. All Rights Reserved. The Next-Generation Talent Profile I The Hackett Group I 4
 The growing digital skills gap
The successful transition of organizations into the digital age is critically dependent on
their ability to attract or develop and retain staff with these requisite new skills. Demand,
however, far outstrips supply, creating substantial skills gaps.

The Hackett Group’s 2018 Digital Skills Poll highlighted large gaps between the skills that
business functions will need and the digital skills they currently have (Fig. 5). In the poll,
executives in business services functions were asked whether they expect demand for
these skills to grow, stay the same, or decline over the next two to three years. Across
the board, a majority of executives expect demand to grow for every skill studied.
Overall, the poll results reflect the greatest consensus around growth in demand for
technology savviness (89%), data savviness (83%) and service design skills (80%).

In the poll, business services leaders also cited significant gaps in these three skills,
as well as in areas such as analytics and modeling, creativity and innovation, agility and
change orientation, and critical thinking as they seek to expand their scope and elevate
their value proposition.

Our discussions and ongoing research with procurement leaders indicate that analytical
capabilities have an impact on most major procurement activities and represent the
largest skills gap for the function. As procurement’s role within the enterprise has
matured, the demand for clear insights and data-driven decision-making has increased
exponentially. Core activities, such as spend analysis, are moving toward real-time,
custom and predictive analytics, while less-mature activities, such as risk management,
are being added to the list of fundamental responsibilities. This combination of current
gaps and projected increases in demand will only escalate the challenges of delivering
on the potential performance benefits of digital transformation. As a result, procurement
functions will need to invest heavily in staff and not just in the tools and technology
necessary for success.

FIG. 5 Current skills gap and projected increases in demand for these skills in the next two years

83% 89%
80%
73% 73% 67% 69%
60% 63% 63% 69%
55% 50% 47% 43% 39% 36% 32% 29%
19%

Analytics and Data Technology Service Creativity and Agility and Versatility Critical Business Customer
modeling savviness savviness design innovation change thinking acumen focus
orientation

CURRENT GAP BETWEEN ACTUAL AND DESIRED SKILL LEVELS (LARGE/VERY LARGE SKILLS GAP)
DEMAND GROWTH IN NEXT 2 YEARS (DEMAND WILL INCREASE/GREATLY INCREASE)
Source: Digital Skills Poll, The Hackett Group, 2018

© 2019 The Hackett Group, Inc. All Rights Reserved. The Next-Generation Talent Profile I The Hackett Group I 5
 An integrated talent management strategy is required
To meet the skills challenge, procurement functions must define and adopt an integrated
talent management strategy that includes four specific practices for delivering the
required skills (Fig. 6). This strategy should encompass principles for determining
which skills and competencies are targeted in recruiting, emphasized in learning and
development, and reinforced in job design and performance appraisals.

FIG. 6 Core elements of integrated talent management

Identify
talent needs Develop talent
Workforce planning Learning and
and succession development
management

INTEGRATED
TALENT
MANAGEMENT

Drive talent
performance
Appraisal, retention Acquire talent
and collaboration Recruiting and
hiring

1. Identify talent needs. Smart automation, continuous innovation and more agile
operating model methods will accelerate the need to retool skills and competencies.
The trend away from transactional, commodity skills and toward knowledge-based
talent increases the importance of having a pipeline of skilled and experienced
employees and leaders. Organizations will need to identify the roles and skills that
are essential to performance and assess existing gaps. World-class organizations tend
to have more advanced strategic workforce planning capabilities, including formal
processes, dedicated people, and fit-for-purpose technology to capture and report data
that aids demand planning for future skills in the workforce.
2. Develop talent. Knowledge-based digital skills, such as strategic thinking, continuous
innovation, analytics, and process improvement, are scarce and expensive. Until supply
begins to approach demand – which will take time – organizations will have no choice
but to prioritize initiatives to reskill and redeploy existing resources to fill critical gaps.
Certainly, this will involve training and on-the-job development – but training will differ
significantly from models that focus on instructing employees how to perform task-
oriented work. Building analytical, project management, critical thinking and business
skills involves more intensive effort. Doing so rapidly will require new development
methods and strategies, including taking advantage of established external programs.

As this shift in development occurs, business functions should begin looking at

providing lifelong learning opportunities that foster critical skills at all career levels –
from associates to senior leaders. One leading practice for establishing the right skills
is providing employees with opportunities to participate in professional certification
or credential programs and master classes. These programs can be effective ways
to align skills requirements with new expectations for ways of working and the
development opportunities that employees desire. They also provide tremendous
benefits to the company as employees apply their new skill sets across the enterprise.
Furthermore, organizations should consider refocusing development programs to
emphasize skills that are transferable across many functional roles such as analysis,
innovation, transformation management and process design engineering. This helps
create a versatile workforce that is able to shift easily among roles and functions, and
even into the business, to fill evolving needs.

© 2019 The Hackett Group, Inc. All Rights Reserved. The Next-Generation Talent Profile I The Hackett Group I 6
 3. Acquire talent. Similarly, organizations will also need to develop new multifaceted
Key takeaways
acquisition strategies that include recruiting and use of third-party service providers to
• More companies are embracing
find the skills required to execute enterprise and functional objectives. As companies
digital technologies as the
prepare for the next-generation workforce entering the market, they will begin to pull
basis for service delivery model
from and rely more on higher education to fill new roles for the future.
transformation and performance
improvement. This will require 4. Drive talent performance. The new integrated talent management model should
equipping the workforce with include greater focus on retaining people and skills to preserve and maximize the
technical know-how to maximize the organization’s investment in training and developing employees. To bolster performance
investments being made. as well as recruiting, organizations may need to re-envision their employer value
propositions and career development models to engage and motivate digital workers.
• Procurement organizations must
Successful companies will be very deliberate in the development of career-pathing
accelerate efforts to shift talent to
models to import and export key roles across the enterprise.
roles that produce greater value for
the business and cross-functional
teams to realize the full potential of Taking action now is imperative
To meet future talent requirements, procurement functions will need to pivot quickly to
digital transformation.
a next-generation talent profile – one that is transforming transactional and task-oriented
• The supply of key skills – such as employees into versatile, business-savvy advisors with analytical and relationship skills.
business and functional acumen,
process excellence, data savviness, The shortage of critical skills means that procurement functions cannot rely on the
continuous innovation, agility, market to fill their talent needs. Rather, they must reskill and retool current staff with
and analytics and modeling – falls new skills and competencies. This will require new investments in formal learning and
far short of demand. Executives development programs, as well as other nontraditional educational approaches such as
expect the gap to widen. The key certification programs and master classes.
is to establish a formal approach to
learning that can close the gap. Given the pace of change, IT procurement functions that are not taking action now to
• Skills development for agile advance their talent management strategy and facilitate development of essential digital
delivery methods are increasing skills will find themselves struggling to deliver on evolving enterprise objectives.
as organizations expect faster
prototyping and implementation of
new technology capabilities. There
will be an increasing need to create About the authors
a versatile workforce that can shift
easily from more traditional project Angela Caswell-LaPierre
roles to roles that include continuous Northeast/Great Lakes Region Leader
innovation, process re-engineering
and problem-solving. Angela Caswell-LaPierre has over 20 years of industry and consulting
experience. She has particular expertise in enterprise cost containment
• Lastly, specialty teams, task forces,
programs, operating model and global business services design,
tiger teams and problem solvers
enterprisewide transformation management offices (TMOs),
will become a new way of working
reengineering processes, deploying global ERP system solutions, and
across the enterprise and, thus, a
executing change management and executive leadership strategies.
new class of skill. As new teams spin
Before joining The Hackett Group, Angela Caswell-LaPierre held senior leadership
up to continuously transform the
positions at Johnson & Johnson, Pfizer (formerly Pharmacia), and Interpublic Group,
enterprise, it will be essential to have
and has directed a number of engagements for Fortune 500 companies undergoing
a well-trained workforce that can
transformational change.
drive productivity and new norms.

Erik Dorr
Vice President, Research

Erik Dorr has over 20 years of experience in consulting, research and

advisory roles in IT strategy, enterprise application suites and business
process re-engineering. Before being named to his current position,
he was senior enterprise research director. Prior to joining The Hackett
Group, he held a number of senior management positions, including vice
president of IT at a global manufacturing company, where he was also a
member of the executive leadership team.

© 2019 The Hackett Group, Inc. All Rights Reserved. The Next-Generation Talent Profile I The Hackett Group I 7
 Tony DiRomualdo
Senior Research Director

Tony DiRomualdo has over 20 years of research and advisory experience

in HR, IT and business strategy. His work has focused on areas including
talent management, organizational structure and governance, technology,
outsourcing, and globalization strategies and practices. Tony has directed
several ground-breaking global studies, producing insights and tools used
by major corporations worldwide. He is the author of numerous reports,
case studies and articles appearing in prominent business and academic publications,
including MIT’s Sloan Management Review. Before joining The Hackett Group, Tony
headed his own research firm and ran research programs at major management
consulting firms.

For more papers, perspectives and research, please visit: www.thehackettgroup.com. Or to learn more
about The Hackett Group and how we can help your company sharply reduce costs while improving business
effectiveness, please contact us at 1 866 614 6901 (US) or +44 20 7398 9100 (UK).

The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking and best
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cloud application implementation. Services include business transformation, enterprise analytics, working capital management and global
business services. The Hackett Group also provides dedicated expertise in business strategy, operations, finance, human capital management,
strategic sourcing, procurement and information technology, including its award-winning Oracle and SAP practices.

The Hackett Group has completed more than 16,500 benchmarking studies with major corporations and government agencies, including 93%
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© 2019 The Hackett Group, Inc. All Rights Reserved. The Next-Generation Talent Profile I The Hackett Group I 8