There are many ways to begin a procurement transformation – an initiative may start with a focus in either strategic sourcing or operational procurement, or it may pursue a “Big Bang” strategy that pushes forward all the components of the function at once. But, no matter the chosen plan, one unifying characteristic of all successful procurement transformations is the holistic, long term view of its system, people, and processes that was taken from the start.
This blog will discuss some key principles around which a successful transformation should be built.
The procurement landscape is littered with many solutions and strategies that promise to deliver but eventually fail. The organizations that succeed are the ones that drive the change from within the department.
Let’s now have a look at the key principles.
Take a holistic view of the source-to-settle process – a holistic source-to-settle process enables the CPO and the other stakeholders to better manage and improve operations, identify and mitigate gaps and risks, pinpoint bottlenecks, and ultimately drive performance improvements across all facets of the department. Organizations can adopt such an approach by leveraging automation tools across the entire procurement process
Aggressively leverage process automation – even if the initial program focuses on only one area of the process, automating the entire source-to-settle process is critical to a fully-realized transformation and architect their plan with that long-term vision
Make the attainment of visibility (into spend and processes) a top priority – visibility into enterprise spend that is timely and accurate can help procurement departments improve performance and place more spend under management
Have the right marketing and execution plans and the standing to drive widespread adoption – procurement transformation is a major change management initiative. It must be fine-tuned to the unique culture and practices of the procurement department and larger enterprise
Have a clear long-term vision and clear goals – a transformation program never focuses on a specific goal or a particular improvement metric. It should be designed, built and executed with a long-term vision in mind that supports current and future spend management success
In the next 2 blogs we will discuss the architecture of procurement transformation. Stay tuned.
For more information on procurement transformation, you can access the research report by Ardent Partners by clicking the download button below- Built to Last: Designing a Procurement Transformation Program for Best-in-Class Performance