- PEOPLE – Mature procurement teams are not only made up of the right mix of strategic and operational proficiency, but the operational model is also best suited and deployed based on that higher level of understanding and capability. Alternatively, less mature organizations are just trying to manage the demand and balance the day-to-day fulfillment needs of the business – often doing so with an inadequately assembled operation.
- PROCESS – The business processes directly impact not only how effective the procurement function can be, but it ultimately affects how the business remains operational. Therefore, less mature organizations need to do their best to determine where and how they can adopt best-practices so they can continue to evolve their value to the business.
- TECHNOLOGY – Most of the leading procurement organizations are leveraging technology to automate many of the critical processes, which allows them to increase their effectiveness and efficiency in delivering value to the business.
It’s been proven that a comprehensive focus on all three areas of the procurement function, what we tend to call the three-legged stool, will result in the most value.
One of the more common challenges many procurement organizations are faced with when it comes to advancing the capabilities of the function is who is going to help them take things to the next level.
Sure, many have tried to go it alone, but few have fully realized true success in doing so. Decisive decision-making can make or break the journey to improving procurement capability.
Being prepared to take a holistic view of the current situation and be completely honest about the issues, gaps, and pain points is critical. Many, even mature organizations, believe that they fully understand the situation and can implement changes on their own. Rarely is that ever fully achieved.
In most cases, to successfully achieve a comprehensive procurement uplift, getting the right players involved might be all it takes.
- Executive Leadership not only authorize funding for these initiatives, but more importantly they hold the keys to all the doors within the company to help endorse, promote and get behind the procurement management team as a strong supporter.
- 3rd Party expertise has proven to provide the essential level of deep experience, expertise and industry intelligence to guide the organization, especially in areas of limited knowledge or when the waters get rough.
- Internal agents of change are an indispensable asset when it comes to making widespread changes to any business function and ideally procurement can acquire these agents from their fellow business functions alike to Finance and Operations.
It’s important to consider every facet of the procurement function in an equal way when mapping out the approach.
Many organizations fall short when they focus on a mere one or two aspects of their operations, such as just upgrading automation or focusing on only refreshing their skill base. These strategies often just lead to the identification of more gaps.
Successful procurement organizations have realized that in order to take their business to the next level, they are best suited by first examining the current state of their operations by looking at everything from how they fulfill purchase requests to how they manage supplier relationships.
Mature procurement organizations work diligently to acquire a deep understanding of their in-house skills, the organizational design, culture, governance and reporting, strategic alignment, supplier selection, buying processes and use of technology automation. It’s been proven that each of these aspects of the procurement function are intertwined, so realizing true change results from only a holistic review.
As the team initiates the plan, it’s import for the team to resist taking shortcuts.
For example, some procurement leaders have been tempted to try to cut corners by ‘reducing the target participant participation’ in order to lessen the burden on their teams or ‘reducing the scope’ to speed up the project. This tends to be more typical of procurement organizations that need the most guidance on their journey.
Certainly, there is good value in a solid spend analysis and even a reliable procurement productivity analysis, but it’s just a part of getting started. However, for the procurement uplift initiative to be a success it benefits most from a much more thorough set of maneuvers. Naturally, having a professional guide on your side can’t hurt either.
- Business process workshopping provide an excellent platform for illustrating what is really happening vs what is supposed to (according the documented processes)
- Stakeholder and customer interviews stimulates the participants resulting in the discovery of true findings and veracity
- Qualitative surveys provide a platform for the customers and users to express their opinions anonymously
- Industry benchmarking is an essential input to provide a foundation for best-practices and planning