Keys to Successful Procurement Transformation

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Transcript

“One of the questions we get a lot from our clients is, how do they ensure their procurement transformation is a huge success?

There are a number of attributes to success that I’ve seen in my career. The first one is a really clear vision. Signed off by the executive team, endorsed by the business that we set at the outset, and that really provides the framework for us to govern the transformation.

The other is having the right talent within the organization, having the right experience of leading similar transformations in other organizations.

Beyond having a clear vision and strategy that’s understood and communicated to the organization, plus the right talent and experience to lead that transformation, it’s really important that we have a set of clear metrics so that we know when that transformation has been a success.

What are some of the things in terms of spend under management, effectiveness, NPS scores, feedback from business functions that really allow us to measure where we were at the beginning of the transformation and the destination that we’ve reached.  Recognizing that we’re always seeking to move on that journey towards an improved procurement function.

Often organizations define a multi-year transformation and that’s important. It’s important to get the buy-in. It’s important to set the right vision.

But also early success is critical. And that’s where we see clients fail versus succeed. Many of our clients embark upon these transformations and the actual successes take a long time to materialize.

So for us, the critical part is early success, promoters in the organization, and that buy-in to see that the time that’s been invested in support of the transformation is worthwhile.

In addition to having a clear strategy and vision, having the right talent in place with experience a transformation, it is vital that there is a clearly understood ROI on that transformation, and that the ROI is not just around a financial metric.

To ensure success it is also vitally important there’s the right sponsorship spine throughout the organization led from the CEO. That will allow the initiative to be prioritized, it allow appropriate investment, and ensure that the broader executive team take accountability for the transformation’s success.

Clients often ask us what are the foundational capabilities that they need as an organization to support the transformation journey.

The first of those is the right talent, that’s senior individuals that have the experience of leading similar projects in other organizations. That’s number one.

Number two, we find that organizations need the right data analytics capability. This is becoming increasingly important as we look to the procurement function of the future.

The third, change management – essential to bringing the organization on the journey and having the right practices and processes in place to support that transformation.

The final one that comes to mind is SRM. As we take the function to the future, we need to have the right relationships, the right governance structure, the right shared innovation, and the right frameworks in place with our suppliers to ensure success.

I’m personally hugely excited about the role that procurement can play in the future. But to do that, procurement needs to have the right talent, the right capability within the organization to really make that change happen and stick within our clients.”