Transformation is the watchword for today’s procurement organisation, as an ever-increasing number of teams look to revitalise the function and provide even greater value to the wider business. According to Procurement Leaders’ 2016 report, Transformation: Redefining the role of procurement, 82% of functions are currently undergoing a transformation. In 2014, this figure stood at around 33%.
So how can procurement best position itself as new trends such as technology, supplier relationship management and risk management are set to shape transformation processes in 2018?
Here are four factors to consider throughout your transformation journey:
Know your goal
Before embarking on a transformation, consider the reasons for this. When does a change become an improvement? While change should not be made for change’s sake, if the aim of the transformation exercise is to improve purchase order management then this change is worth making. Procurement chiefs must ensure that each aspect of the change has clear goals for improving specific areas of the function. If the means cannot justify the ends, procurement executives should think twice before undertaking any transformational activities.
Periods of stagnation and complacency may also encourage the function to transform as a way of showing the wider business that it can help drive the business forward.
After identifying the reasons for the transformation, everyone in the team must understand the key objectives the function seeks to achieve. If everything is a priority, nothing is important. At times, the most difficult part of a transformation process is omitting what not to do. Procurement must identify its primary stakeholders, establish two or three key objectives that most align with their priorities and use this as a basis for the focus of the transformation. This activity will help ensure the focus of the transformation is streamlined and aligned to the objectives of key stakeholders.
It’s a marathon, not a sprint
Transforming the procurement function should never be seen as a race to the finish. Ensure the pace of change suits the needs and priorities of the business. New ways of working must be introduced incrementally, with periodic breaks to allow the team to adapt. Move too quickly and there is the risk that people will fail to assimilate the changes, affecting your chances of success.
Follow the leader
As a leader, it is not unreasonable to demand more from your procurement team. Team members often perform down to the minimum expected of them and do not excel beyond this. This is problematic in daily business ventures, but even more so during a transformation. A good leader should work to discourage this type of complacency.
Sometimes this can mean acting in a way that is perceived by some staff as being slightly unreasonable, yet this is often a misunderstanding. If employees feel change is being forced upon them and not with them, then they can become apathetic to the process. Procurement executives must strike a balance between applying productive pressure when driving transformation and encouraging staff to drive change.
Procurement Leaders is currently witnessing an influx of discussions on accelerating transformation. There will be heavy investments over the next few months in terms of resources to get transformation journeys under way for the coming year. Procurement must be on top of its game from the very inception of these new processes if it wants to get ahead on its journey.
Procurement Leaders is currently conducting its annual planning survey community and requires your expert opinion on the future of the function. Over the last year, the Category and CPO Planning Guides have been the most accessed reports by Procurement Leaders members, which shows the value in the collective knowledge-sharing of the network. In the spirit of this shared-intelligence approach, Procurement Leaders invites you to take the survey, which should take around 10-15 minutes to complete.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.