Executive Perspectives: The Ideal Procurement Ecosystem and Why It Matters

Executive Perspectives: The Ideal Procurement Ecosystem and Why It Matters

The procurement profession, like many others, is rapidly changing in 2020. The dynamic of procurement teams and working environments are radically different in this new decade. Most companies are faced with challenges in rapid digitalization, talent gaps, and new regulations. In addition, niche business needs are driving much change. Forward-thinking companies know the importance of operationalizing their Procurement function to overcome execution challenges and achieve better business outcomes.

However, identifying these gaps and getting started is often a daunting task. It’s essential for procurement leaders to keep up with trends, market / industry changes, and digitalization. Equally important, I believe building a Procurement Ecosystem is what empowers industry-leading companies to outperform in the market.

The Procurement Model – 10 Years Ago

Ten years ago, I founded Denali Sourcing Services, a procurement-as-a-service provider. I was passionate about the value that Strategic Sourcing at scale could bring to organizations and believed that our approach to addressing resource constraints was the future of procurement. In some aspects, I was right- cost savings is a reliable driver for value creation for the company, but other aspects have changed and my perspective has evolved. The experience of working with international, global clients has helped me understand the importance of procurement, and the value procurement adds to the business, regardless of the industry. Ten years ago, I knew that procurement could be a huge value-driver, but I needed time to prove it. And that’s what I’ve spent the last decade doing.

Through our work, we continue to transform procurement operating models and enhance procurement ecosystems across our international client base. Through this work, I see a significant shift in how procurement is being perceived by businesses. I still absolutely believe that Strategic Sourcing drives significant value when planned and executed effectively. Yet, what has changed the most is that a new paradigm has arrived for procurement that views spend and value creation at a higher level – that is Category Management. Category Management has been a big change in the way I approach procurement and problem-solving.

A New Decade Creates New Challenges for Leaders in Procurement

Procurement’s challenges continue to evolve, and new trials get added as the complexities to manage the function keep growing every day. Overcoming these challenges goes back to the shift I mentioned earlier. As procurement becomes a bigger value-driver for the organization, we are asked to address more spend and areas of the business. Indeed, this is a wonderful outcome of our tireless work for cost reduction, improved supplier relationships, and increased visibility into our spend, to name a few.

Throughout the past decade, we have helped procurement organizations:

• Define their mandate and vision

• Evangelize and tell their story

• Operationalize how they can create value

• Deliver on defined and aligned business mandates

We started to see some organizations stand out from the rest over the last few years. We spent time getting curious and analyzing what made these organizations stand out. The answer is, they looked at their overall Procurement Ecosystem as a whole and proactively worked to make this approach more robust.

What is The Procurement Ecosystem?

To understand the Procurement Ecosystem, you must start by looking at the highly interconnected network of co-existing elements:

• Stakeholders

• Business Imperatives

• Suppliers

• Third-party partners

• Data (internal)

• Intelligence (external)

• Enabling tools and systems (which ensure this ecosystem functions in harmony)

Historically, procurement organizations tried to increase their impact and maturity by addressing some of these elements one-off and not in an integrated fashion. Few organizations took the time to be reflective and see how connected procurement is as a business function.

The Procurement Ecosystem is your particular environment. When you understand it, you can take a holistic view to improve the structure, internal and external impact, and resources within the highly interconnected procurement network.

Ask any procurement professional, and they will confirm one of their biggest challenges is that all their work is coming at them from multiple angles. If you are in the right mindset, you can see that the problem becomes a realization that everything is highly connected. To make sense of your priorities as an organization, you must become more agile in your work and mindset. You must optimize your ecosystem so that it functions well for you and your teams.

Procurement Managed Services vs. Procurement Ecosystem: What’s the Difference?

Recognizing how important a holistic approach is to procurement success, I wanted WNS-Denali to be on the leading-edge with how we approach our solutions. Historically, our service model addressed one segment of this ecosystem: an organization’s ability to execute. Our “procurement as a service” offerings such as sourcing, contracting, and procure-to-pay, were created to provide additional bandwidth and capacity.

Over several years, we began to focus on growing organizational capabilities and providing enabling technologies. For example, we have an academy, a category management enablement program, a collaborative stakeholder relationship management platform, and knowledge management tools.

Today when we start working with a new client, we aren’t just optimizing and adding capacity like most procurement service providers. Now, we have a holistic conversation that truly addresses every critical element of the Procurement Ecosystem. We recently won an award for the work we did with a client in the High-tech sector. They hired us because they needed the capacity to get more work done. Soon, we co-created a plan to involve stakeholders and change management through process automation, new technologies, and the ability to track contributions to growth and innovation. We did all of this work while delivering value through sourcing, contracting and category management. You can listen to their story here in this short podcast.

If you would like to learn more about how you can improve and enhance your Procurement Ecosystem and run your team with minimal friction, listen to our webinar with SIG. Listen now: ”Procurement Leaders: Make Your Ecosystem Work for You.”

About the Author

Alpar Kamber
Corporate Executive Vice President & Head Procurement Services

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.