7 Major Ways to Transform Procurement Successfully

Do you know what procurement transformation means and the various ways to accomplish it in a company with thousands of employees and multi-million dollar spend portfolio?
Today, the main objective of procurement transformation is not only to save money or optimize the process.

Many procurement companies are searching for new ways to shift from a hasty customer support function to a strategic one that can bring competitive advantage along with innovation to business. This means overhauling procedures, thinking on the operational model and fetching a new technology in order to support both.

Here, we present seven key ways on how you can transform procurement successfully.

1.Equivalent Development

It is often difficult to understand where to start at the time of transforming an operational model, technology, or end-to-end procedure. For driving value, one must work on these in a parallel way, looking at the new technology, processes, as well as people and ensure that decisions are organized across all departments.

Working with technology stakeholders and providers closely helps keep everyone moving in sync when you touch each factor.

2.Sourcing Centers of Excellence

Various organizations develop via achievements and mergers, and by expansion into new market trends, thus creating complex and overlapping business units and regions. Developing centers of excellence makes the department focus on more strategic sourcing and supplier management efforts inside assigned grouping. It is organized around business units with the objective of eliminating duplicate efforts and bringing economies of scale.

3.Standardize on a Single Point

One of the major objectives of procurement transformation is standardizing on a single point of entry into a more unified and purchasing process globally. For instance, a restaurant where all the customers are provided with a single menu, at the same time there are various functions required for delivering an organized dining experience to them.

In the same way, procurement is assigned to providing a single view which supports risk, finance, sourcing, and more are all present together to offer a better purchasing experience.

4.Speed Up Processing Time 

Speeding up the processing time means to help the company reduce time to market. When you are designing a new operating model, you need to make everyone understand how quick timeline in sourcing can actually improve the value on the back end. You need to leverage approval workflows in order to drill into blockages and identify the ways on how to reduce each and every process to develop a realistic service level agreement.

5.Manage Services

Today, organizations are constantly searching for ways to source and manage services more effectively. It is important to develop standardized forms for several types of services as much as possible, collecting information from every category, creating preferred vendors, as well as implementing the forms in the  system.

For instance, when you are ordering any specialized service, it does not matter which group you belong to, a standard form goes to the same category department, and the same risk management people get included. This will be quick and easier in the front end and will yield an expected expense and proper data in the back end.

6.Bootcamp and Playbook

Thorough training and supporting documentation are needed for supporting the changes across a global organization. A playbook helps in documenting implementation and anything that other people in various roles require to do for their daily jobs.

Boot camp training allows people to come together from all across the world to coagulate a new process. It is also an excellent opportunity for building a strong team and uniting around a new vision.

7.Speed Up Localization

An established organization does not stand in the same place for a long time. Maintaining controls along with a single menu globally is extremely crucial. Also, you must fetch additional markets, categories, and business units into the system as soon as possible. For each new country you travel, new market category, and new achievement will not go through a complete unique implementation.

The Bottom Line

Procurement is gaining a lot of strategic importance within a business and it will continue to deliver on traditional cost savings while also quite focusing on digital technologies and supplier collaborations.