From tactical to strategic: how procurement transformation works


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An online news source for procurement professionals, The Strategic Sourcerer, has outlined the essential steps for achieving successful procurement transformation, morphing the function from predominantly tactical to a fully strategic one.

Many professionals in the procurement industry are elbow-deep in paper forms and time-consuming manual operations. But this doesn’t have to be the case, even if internal stakeholders believe that’s what procurement is all about. By reaching out to other business units and speaking the language of IT, marketing and other units, procurement pros can change assumptions and show how procurement can be a strategic value-generator.

This may entail engaging the expertise of a procurement consultancy, but it’s certainly possible through these “outreach” efforts for procurement to sell itself as a profit centre. This can be done by bringing executive decision-makers on board, leaving as-needed purchasing behind in favour of a strategic sourcing methodology, and generally streamlining as many processes as possible.

Once executive buy-in is in place, procurement will still need to build the business case for each new strategic initiative in its efforts to abandon tactical approaches, supplying reports on the results to prove their merits. Such endeavours foster growing internal respect, which in turn can be leveraged to recruit and hire an executive-level procurement professional.

As the article puts it: “A good CPO will evangelize for the function internally and externally. Their faith in Procurement could prove infectious for leadership within the company as well as leading candidates.”

CPOs can hugely assist the success of targeted transformations, bringing the goal of strategic methodology ever close. For instance, instead of working on one-off purchases “to keep the lights on”, strategic sourcing takes a holistic view of purchases to deliver maximum value, making important sourcing savings in the process.

Finally, it’s crucial to avoid the pitfall of seeing procurement transformation as an essentially piecemeal process. There will always by areas that require special attention, but procurement teams and their leaders must still engage stakeholders throughout the organisation so that their people, processes, metrics and technology are demonstrably aligned with overall business goals.

Ed Cross

Ed founded Odesma in 2014 with the explicit intent of creating a new kind of procurement consultancy founded entirely on cloud principles. Deploying best-of-breed subject matter experts alongside the best on demand technology to deliver rapid and effective change for customers.

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