In a modern business, the goal of procurement transformation is not just to create cost savings and optimise processes; it must also bring about a shift in the organisation from transforming reactive internal functions to responsive and strategic functions.
A successful transformation should result in innovation and competitive advantages for your business. This does not, however, require a radical change in processes. Rethinking and reinvigorating the operating model while introducing new technology and key roles into the organisation can support both of these goals. As an organisation grows, the harder it becomes to reshape its functions and processes. The mere thought of running a business with a multi-million dollar spend portfolio through an internal transformation can be daunting. That is the case, however, until you identify the exact points of focus for transformation and strategise how to break down and streamline this process. Introduce parallel development across your procurement transformation The biggest challenge in driving change across processes, operations, and technology is deciding where to begin and how to proceed. A good way to approach this would be to drive transformation in a parallel movement across each of these components. In order to ensure that the decision-making is cohesive across each of these, you must also identify the relevant technology, people, process requirements, and work closely with external partners and internal stakeholders simultaneously. This will not only streamline the transformation process but also help you make more informed decisions on what adjustments should be made in real-time. Create centres of excellence for sourcing As businesses initiate mergers and acquisitions and expand, a complex and overlapping structure inevitably takes shape. This can result in the same executive or manager handling processes that are of differing priorities, leading to wastage of resources and inefficiencies across the board. By creating centres of excellence focused on sourcing, for either different regions or various business units (depending on the scale of your organisation), teams can refocus their efforts on higher value-added initiatives across supplier management and strategic sourcing. This can also bring about a balanced workload and shared responsibility where your procurement professionals will not be required to shift their attention between deals worth millions and lower-value commodity contracts. Leverage digitalisation to create a single channel for the purchasing process One of the main goals of your transformation should be to create a standardised, singular point of entry for purchases across your business. A contemporary procurement priority is to integrate finance, risk, compliance, and sourcing under one cohesive vision that gives you an overview of the overall purchasing process. Identifying this as a key goal will guide the direction of the transformation process and the digital systems you utilise to help you achieve this goal. In this stage of your transformation, the right source-to-pay suite can be the answer to your needs. Make your processes more efficient to speed up time-to-market As you plan your transformation, an important factor to consider is how to make certain processes more efficient and responsive to critical market requirements. While this should be a key outcome of procurement transformation, it should also be fully understood while businesses are devising and launching new operating models. Conveying this goal to your team and relevant internal stakeholders creates value for your company by speeding up time-to-market and overall business timelines. Factor future business growth into your transformation A business should always account for its growth. With each new expansion or acquisition, your frameworks must be able to support your growth without needing to be built from scratch with every new development. The adaptability of technology becomes an important feature to respond to this procurement need. During the transformation process, your business must invest in strategies that are resilient and can manage and utilise organisational resources efficiently regardless of uncertainties in the market. Having to integrate new processes into your business at every turn is not practical and will inevitably lead to undermining the foundation of the systems you have in place. To avoid this, it is vital that any transformation that you need to undergo factors in the possibility of growth. Leverage high-value opportunities with simplified and streamlined processes As your procurement operations are optimised through the use of digitalisation your procurement teams are freed up for higher value-added tasks such as supplier management, strategic business goal formulation innovation maximisation, and capacity building across your teams. This is certainly a great opportunity for companies to spur internal growth for their teams and support people development through new and dynamic opportunities. Identify the key steps that will simplify and streamline your procurement transformation Procurement transformation can seem daunting at the outset. By leveraging the right digital solutions and integrating your processes strategically, however, your organisation can realise its goals and enjoy a more straightforward path to efficiency.
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Kronos GroupKronos Group has been named one of the fastest-growing companies in Europe. We provide custom solutions from procurement and finance to project management. We support our clients with expertise in business transformation and operations consulting. Project Management |