Tips for Capturing Long Term Success in Procurement Transformation

The topic of the evolution of Procurement has been quite popular in recent years as professionals within the industry look to advance and change the perception of the role holistically. In fact, I was fortunate enough to speak on the topic among several other poignant speakers at the NLPA conference in 2016. With this topic comes one that also has been around for some time and pairs well with the idea of change and evolving one’s organization in preparation for the future, Procurement Transformation. Like any other major initiative within an organization a Procurement Transformation requires many elements to align in order to increase the rate of success long term and ensure its impact is felt throughout the departments it affects. While there are a myriad of sources and articles on this topic, I just want to highlight a few key factors for success based on my experience and research.

1. Have a really solid support mechanism. This goes beyond just having executive buy-in, but having a team INCLUDING executive that will drive the change throughout the organization. This also includes have a structured business case for initiating the change, this will help to have something to lean on when challenges arise from any nay-sayers in the process.

2. Have a clear method of measuring the impact of the change. This means establishing a clear calculation of ROI of the initiative but also having several other metrics in play. Some might include reductions in invoice processing costs, process efficiencies gained from technological improvements, and productivity level changes within the staff.

3. Setting the right expectation for the change based on the current level of maturity within an organization. People often throw around terms like “world-class” and “best-in-class” more than we hear about Kim Kardashian in pop culture news. While these terms are effective in selling an idea around an ideal state, they are not indicative of where all organizations need to be. Procurement departments that are well under staffed with no processes in place and rudimentary technologies will benefit first from just establishing core process definitions and technologies that will improve efficiency. World-class to an organization in a very immature state could be incredibly daunting and overwhelming, and altogether not realistic in the near future. Ultimately what I am saying is that each Procurement Transformation needs to focus on determining a clear starting point and moving to a realistic state within a reasonable amount of time.

4. While many articles note that success is driven by gaining momentum early on, and I agree, I think a key factor is longevity. Starting the race at full speed will only lead to an inevitable slow down long below you cross the finish line. Make sure the right team is in place to continue tracking the initiatives that come out of the Procurement Transformation road-map. Tracking the successes from these actions will help to keep people engaged long after the dust has settled from the initial starting line take off. Levering external support is one way though to get the right pace set up front with a core internal team to carry out ongoing activities.