Procurement Organizations Are Seeking Better, Faster Ways To Improve Productivity & Value
1.
Choose the Destination
Organizations are finding that there are more efficient models, such as managed services (aka Outsourcing), that reduce organizational strain and maximize time and value for the Procurement function.
The journey starts by asking yourself what challenges are we facing and how will managed services help?
Perhaps the existing procurement or sourcing teams are stretched too thin due to high demand, making it difficult to meet the needs of the business. More mature organizations often find that capacity becomes a concern when they begin to take on a more strategic role in the company.
Maybe there is a skill gap that might be due to increase in procurement’s role or perhaps rapid growth has resulted in a need for different types of talent to support business objectives.
Sometimes there just isn’t enough value based on the investment, wherein the cost of the procurement function is seemingly too high or too low. This is often found with less mature organizations that have a sub-optimal operating model or haven’t effectively right-sized their staffing.
A recent acquisition of a new procurement technology solution now requires a support team (aka helpdesk) to provide the business user with the assistance they need.
2.
Assemble the Team
In order to set the procurement organization up for success, it is best suited to involve all key players, not just procurement Managment.
A cross-functional team needs to focus on performing root-cause and gap analysis’ in order to definitively determine what is needed from a managed services perspective.
Within procurement, it’s important to engage the team leads and prime-users to a sense for their day-to-day and validate work and workloads. The views of the sourcing and procurement teams provide the deep subject matter needed to effectively discern the work that is to be out-tasked.
Functional managers, such as IT, Finance and Operations, in order to get their perspectives on out-tasking and the expectations they may have. This will ensure proactive acceptance to any managed services program.
Engage stakeholders and internal customers to validate their needs and expectations of the procurement services being considered. This will bring the two groups into a collaborative mode that will increase the success of the initiative.
Getting deeply engaged with the critical personnel groups is essential to assessing and validating the opportunities and getting the buy-in and collaboration that is necessary to get the program launched.
3.
Chart The Course
At this stage, most procurement organizations have determined the destination and have acquired enough support to initiate the plan. Therefore, the team now needs to draft a comprehensive plan for realizing it’s goals.
It’s here that the details can make or break the managed services program. Both the procurement organization and the managed services provider must be united it their collaborative approach in establishing and prioritizing the following.
Business process mapping (current-state)
Scope of managed services (future-state)
Impact to existing organization (what’s changing)
Target metrics and measures (value capture)
Change management approach (user adoption)
Without an effective understanding and strategy for each of these aspects, the transition to the managed services program could face significant challenges.
4.
Navigate The Expedition
Trying to do it all at once can be a risk. All too often, procurement organizations bite off more than they can chew by attempting to just “go-live” on day one. Taking a sequential or even a parallel approach to deploying the managed services program will be the best course to take.
The more successful procurement organizations have embarked on their journey by taking the following approach.
Introduce the program via initial communications aligned to the change management strategy.
Establish the program management team and initiate the startup activities.
Define and implement pilot workstreams based on specific criteria, such as line of business or spend categories.
Upon successful pilot programs, formally deploy the managed services program for the full scope.
Stand up a model for continuous improvement and program governance.