Built to Last: Three Paths to a Successful Procurement Transformation – Path 1 – The Greenfield Scenario Contd.
In our last blog we introduced path 1 to procurement transformation journey – the Greenfield scenario. Taking that further, let’s have a look at the other key points on this path.
- Key stakeholder considerations – unless they have external experiences, the entire organization hierarchy from the executives on down have never seen a high-functioning procurement operation at work. The concept of procurement transformation may resonate but there’s a greater need to “see” proof in actual results like savings and quality gains.
- Critical decisions points – since there are many areas in need of major improvement, the critical decision is not deciding what to do, but rather, in which order to do them. The prioritization of focus, energy, and resources on the areas that will provide the greatest near-term impact without undercutting the long- term vision will be critical in earning the trust of the organization and building the momentum over time. In this scenario, the procurement leader must be able to perform a quick diagnostic of the entire organization to determine the best strategy to improve and/or rationalize the staff while maintain current operating levels.
- Typical CPO path – the new CPO in this scenario will either choose one of the two paths to start with:
- Start with an investment and focus on strategic sourcing solutions and processes to drive savings that will fund the ongoing initiative and drive engagement with the larger enterprise which will build credibility. After sourcing is in good shape, the enterprise is ready to tackle operational procurement, or,
- Start with a move to clean up operational procurement and gain visibility into spend and processes and drive compliance with the launch of a procure-to-pay system. Once visibility has been established, the team can focus on smarter sourcing.
Stay with us as we explore the next path in the next blog.
Click on the download button below to access the part 2 – Built to Last: Three Paths to a Successful Procurement Transformation of the 2 part series on procurement transformation by Ardent Partners.