Vision and agility. These distinguish good procurement organizations, from great procurement organizations. Every high-performing procurement team I’ve encountered over my decades-long career in the industry has a clear, well-articulated vision, and the agility to make it happen.

Consider these trends, identified through our recent benchmark research:

  • 60% of high-performers develop and maintain a clearly documented vision and value proposition, and are considered an integral part of a company’s goal-setting team from the onset

  • 80% of high-performing organizations distinguish strategic roles from operational roles

  • 90% of high-performing procurement teams consider business acumen, relationship-building ability and category knowledge to be every bit as important as traditional analytical and technical core competencies

 

Procurement Operating Model

 

So, why do so many procurement organizations still get tangled up trying to achieve more strategic objectives?? The simple answer is that procurement has historically been a reactive function. This is typically by design. I am sure you can relate to that sentiment. A stakeholder needs a contract executed, a PO issued, or a supplier payment tracked down and they need it now. As Procurement People, It is easy to become so bogged down in addressing these pressing daily needs – and that means there is not enough time, energy, or resources left to be more thoughtful and strategic.

That’s why I am a strong proponent of segmenting your procurement team by function or work type and out-tasking elements of your workstream where possible to help you better manage the ebbs and flows of work through a variable-capacity model.

To help reimagine the design of your procurement operating model, picture a pyramid divided into three sections:

  1. Base: Transactional Work – Employ automation and technology enablers to help manage the reactive, transactional work at this level. Consider out-tasking where possible to help free up your internal procurement team to tackle higher level, more proactive work.

  2. Middle: Execution Work – Hire smart, experienced project managers capable of applying strategic vision to deliver solutions and value for stakeholders. Third-party service providers can help add depth of category expertise in partnership with internal project managers as well as add the capacity needed to be agile and responsive. Less automation at this level, more collaborative technology drivers.

  3. Top: Strategic Work – Build out your category management organization. Start with your key categories and ensure that those are led by dynamic experts with the stamina, critical skills, and bandwidth to build relationships, develop long-term strategies, and execute on their plans

In many organizations, one or more of these pyramid sections is not optimized. We often observe the following:

  • Transactional work is inefficient and spills into the execution workstream.

  • Execution work, such as RFPs and contracting, is given to the Category Managers thereby shrinking their strategic working time.

  • Strategic Category Managers need more support or enhanced skillsets to achieve their targets and goals.

Building a model with a balanced triangle adds to your organizational agility and gives you room to build and execute your strategic vision. But remember, this re-imagined procurement operating model won’t be achieved overnight. You will need thoughtful planning and a stepped approach to make this vision a reality. Wherever you are on your journey, download our whitepaper “Vision and Agility: Re-Imagine Your Procurement Operating Model” for advice and practical tips for moving your organization forward.

 

About the Author

Alpar Kamber
Corporate Executive Vice President & Head Procurement Services

Alpar Kamber Alpar Kamber is the Head of Procurement Services at WNS. He was the Founder and CEO of Denali Sourcing Services (now a part of WNS), a next-generation procurement services provider that enabled procurement organizations to influence more spend, and execute more effectively and efficiently. Prior to Denali, Alpar developed his cross-industry expertise in procurement value chain while in management positions at Ariba, FreeMarkets, Diamond Technology Partners and E&Y. He holds an MBA degree from the Tepper Business School of Carnegie Mellon University.

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