Procurement Transformers

Procurement’s Transformation: A 11 step Toolkit for Success

Procurement's Transformation: A 11 step Toolkit for Success


The procurement function in most companies has changed from being a support team to becoming a strategic partner in the success of the company. Cost savings is no longer the top KPI for procurement departments. Global CPOs are more concerned with risk management, resilience, sustainability, availability and transformation objectives.

The pandemic has underscored how important it is for procurement leaders to have visibility into Supplier Networks as well as Risk Management capabilities to preempt and address disruptions quickly. CPOs are getting equipped not only for current events but also for potential long-term impacts on their ability to procure goods and services.

With Great Power Comes Great Responsibility

Procurement technology has evolved as well, in parallel. 2021 was a watershed year with AI-powered cognitive tools. Having evolved significantly to help automate large portions of tasks from Source to Pay, Procurement, Legal, and Accounts Payable, Cognitive Procurement tools allow officers to focus more on value-added intelligent activities.

As the role of procurement changes, so does its risks. Successful CPOs know how to spot them and avoid them. And this toolkit for transformation outlines 11 steps to help precisely with that.


11 steps for Procurement Transformation

Step 0: Define Goals and Priorities

Step 1: Design an Effective Technology Strategy

Step 2: Prepare Clean and Accurate Data

Step 3: Integrate Automation

Step 4: Streamline Procurement Processes

Step 5: Communicate Goals, Plans and Progress to all Stakeholders

Step 6: Build Effective Team with Required Skillsets

Step 7: Recognize and Reward Good Performance

Step 8: Bring Support and Commitment From Top Management

Step 9: Embrace New Ideas and Innovations

Step 10: Involve All Stakeholders

Step 11: Measure and Provide Reverse Feedback

Step 0: Define your goals and priorities.

Is it cost-cutting, automation or something else? Consider the impact of each goal on different stakeholders including employees, customers and suppliers as well as shareholders. Successful CPOs know to set both short term quick wins that are easy to achieve and also long term sustainable successes for the Procurement function in terms of its strategic relationship with other functions within a company.

Step 01: Design an effective technology strategy 

How do you want procurement’s role to be defined by this toolkit? This is not about acquiring new tools; rather what these technologies will help you accomplish through them! Choosing the right enabling technologies which fit into your overall IT strategy can give huge efficiency, cost and productivity benefits.

Step 02: Make sure your data is clean

Without accurate data you cannot transform procurement’s role in a company! This means that before any transformation can happen we need to know what each of our supplier contracts really say so there are no unintended consequences when using new technologies for contract management or negotiating better prices with suppliers.

It is about ensuring the information is complete and accurate for meaningful. It has implications on analyzing risks associated with supply chain disruptions, setting targets or defining overall expectations for a given business cycle. This step involves identifying gaps in current processes and defining clear roadmaps on how to deal with them. For example, if we have not been able to identify all the items covered by specific contracts then our data is not clean and we need to work on a plan to improve this.

Step 03: Automate where possible 

Procurement Officers are only human after all and cannot be expected to do everything manually! It means activities such as contract management, supplier management, spend analysis should be automated wherever possible so that officers can focus on higher-value tasks. This will also help reduce the chances of errors being made during manual processes.


Step 04: Streamline procurement processes

Standardize them across different functions within the company. By doing this, you make it easier for everyone in your company (including suppliers) to understand and comply with what is required of them in terms of procurement processes. It also helps identify bottlenecks in the process and areas that need improvement.

Step 05: Communicate your goals, plans and progress regularly to all stakeholders

Keeping everyone informed is key to a successful transformation! It ensures there is no misunderstanding about what you are trying to achieve or why changes are being made. It also allows for continuous feedback around issues or concerns. So, they can be addressed quickly.

Step 06: Build an effective team

With the necessary skillsets required for the transformation – good teamwork is essential! Not only do you need people with the right skillsets but it’s also important to have the right culture within your team as well as good communication between different teams/functions. This helps avoid any conflict and allows everyone to work together effectively towards the common goal of transforming procurement.

Step 07: Celebrate your successes

It’s important to recognize and reward good performance! The journey is the destination in itself. Timely recognition and rewards go a long way to boost motivation and foster morale to continue working hard and achieve even more. It builds a positive image for Procurement within the company which can only be beneficial in the long run.


Step 08: Get the buyin from top management

No transformation is possible without full support and commitment from senior leadership! Without this, Procurement cannot have a seat at the decision-making table which would be detrimental to its future growth. Top Management has to understand what we are trying to achieve as well as why it’s important for them before they can give their approval. They also need to commit resources (budget) so those procurement officers can use enabling technologies effectively during this transformation process. This will help ensure that all our efforts do not go down the drain because of lack of planning or budget constraints.


Step 09: Be openminded about change 

Embrace new ideas/innovations and adapt quickly when needed! As the world is constantly changing, Procurement cannot afford to be static and needs to be able to adapt quickly when necessary. This means being open-minded about new ideas/innovations and not being afraid to try out something new even if it’s a bit of a risk. It also means being flexible enough to change plans if the situation demands it.


Step 10: Get everyone onboard – this is crucial!

Without support and cooperation from all stakeholders, it is impossible for Procurement function to transform itself into a strategic partner for your business’s success. Senior Management has to ensure that procurement officers have their full backing to pursue innovative ways of improving operations  as well as getting finance approvals when needed so that they can make essential changes such as embracing a new framework or adopting AI.

It could also include providing an adequate budget (which often comes with increased responsibility) so Procurement Officers can attend training courses, conferences etc.. It may also mean letting go of some control over certain procurement processes so that Procurement Officers can implement the changes required for effective transformation.


Step 11: Measure and provide reverse feedback – it helps track progress and ensure that targets are being met!

This is an important step as it allows for course corrections en-route. It also helps identify areas that need more attention so the team can focus on them. This can be done by looking at things such as process improvement, increased efficiency, reduced processing time and improved visibility into spending. Measuring the impact of procurement’s transformation will help you determine whether or not the changes you made were successful and allowed you to achieve your goals! By doing this, Procurement Officers can prove their value to the company by showing tangible results of their efforts.


Conclusion: Maintain open communication with all stakeholders – keep everyone in the loop!

Good communication is key to a successful transformation and should be maintained throughout the entire process. This will help avoid any misunderstandings or conflicts between different teams/functions within the company. It will also allow everyone to work together effectively towards the common goal of transforming procurement.

By following these steps, procurement can successfully transform its role within a company and become a true business partner. It ensures the organization can withstand any future challenges, including COVID-related disruptions, and continue to thrive.

Amit Shah

Published by
Amit Shah

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