We are back with procurement transformation series and this time we will talk about how to build a business case and develop an implementation plan for procurement transformation program. (Click here to access the part 1 of the transformation series.)
For any organization transforming procurement department is more of a journey than a destination. In this journey the actual starting point (or where) for a procurement transformation journey depends on where the department is today – its current state.
We will discuss three common current state scenarios and present a recommended path for each.
Path 1: The Greenfield Scenario
- Current state – in this scenario there has been little-to-no-focus or investment in the procurement function, with procurement operating as a tactical back-office function devoid of any strategic engagement. In such cases, the catalyst for change is often hiring the organization’s first CPO.
- Key people considerations – the sourcing and procurement competencies of the staff are, in general, lacking compared to best-in-class procurement organization, as the department never had an experienced procurement leader at the helm.
- Key process considerations – along with slow adoption of any new processes, there will be lack of visibility and limited collaboration across the operation as the procurement practices will not be current to the times.
- Key technology considerations – the procurement department will be manually driven and largely lack the skills and experience needed to properly select, deploy, use and optimize a suite of supply management solutions. Resistance to new technology from within the department prevails.
We will continue with the other key points to be considered for the Greenfield scenario. Stay tuned!
