Procurement Transformation is a hot topic that continually inspires hot debate. Within organizations of all shapes and sizes, Procurement is looking for opportunities to rework its operations and realize greater strategic value.

It's never a bad thing for organizations to discuss Procurement's evolution, but misconceptions around what Transformation really means are troublingly common. Organizations that find themselves in the lower left of the Procurement Maturity Model often dismiss Transformation as beyond their means. At the other end of the spectrum, organizations who've achieved best-in-class status can feel tempted to get lazy and give up on further transformations. In both cases, these business are pigeonholing their Procurement function and

Every organization is capable of carrying out a Procurement Transformation. Though the process will look different for each organization, similar principles and best practices apply

What could Procurement Transformation mean for your company?


Your organization and its Procurement team are likely buried up their eyeballs in paper forms and stuck wasting valuable time on manual processes. There's no shame in that. Within many companies, internal stakeholders still believe Procurement can only perform tactically. Now's the time for Procurement to shake things up and change the conversation. Oftentimes, perception is reality. For the function to operate as a strategic value-generator, its peers within the organization need to recognize it as such.

To begin transforming its own operations, Procurement should first start to focus on how it can enable other business units. By speaking the language of Marketing, IT, and other units Procurement can kick start the constructive, mutually respectful conversations they'll need to make Transformation a reality.

It might require the outside help of a consultant, but with hard work Procurement can sell itself as a profit center and begin to attract executive buy-in. Once they've got the business on-board, Procurement can start hiring to a more strategic role and abandon as-needed purchasing in favor of a strategic sourcing methodology. It'll take time and effort, but this cultural shift will ultimately manifest itself in cost reduction, supply chain visibility, and renewed operational efficiency.


With increased internal buy-in and a more ambitious mission, Procurement can begin to transform its approach to people, processes, and technology. Even with a new level of support, however, they'll likely have their work cut out for them. Abandoning tactical processes and encouraging a new approach to purchasing will take time. Each new initiative will require Procurement to build a business case and ultimately report on its results. These efforts will get easier with time, but the hard work of establishing organization-wide investment will prove challenging without a strong leader for the function.

That's why an operational Procurement group might best approach Transformation by emphasizing recruitment. At this point, Procurement will have earned a certain level of internal respect. By leveraging this to recruit and hire the right executive-level Procurement resource, the department can ensure it continues to build clout and exert greater power. A good CPO will evangelize for the function internally and externally. Their faith in Procurement could prove infectious for leadership within the company as well as leading candidates. Once this savvy leader has attached their name and reputation to Procurement, targeted Transformations will enjoy greater success. 


These are the organizations who've fully embraced the mindset and methods of Strategic Sourcing. Rather than conducting one-off purchases to keep the lights on, they're committed to viewing purchases holistically and driving for maximum value. For them, Transformation is likely a more incremental process than it is for Operational or Tactical units. That doesn't mean it's not happening.

Strategic Procurement teams who are interested in delivering value year-over-year can first transform the way they assess themselves. Developing a more nuanced approach to tracking and reporting will help them make an effective business case for other Transformations. Though they'll certainly identify areas that require special attention, they should resist the urge to make Procurement Transformation a piecemeal endeavor. Rather, they should engage stakeholders throughout the organization to align Procurement's people, processes, technologies, and metrics. Taking this four-pronged approach to Transformation will ensure the function experiences a holistic evolution.


World-class, best-in-class, industry leading . . .  however you describe a highly mature Procurement unit, it doesn't change one important fact. These teams still have to work to do. At this point, your organization should have arrived at a key realization - a single initiative cannot transform Procurement. Transformation isn't about moving from Point A to Point B at all. It's instead about instigating a cultural shift and building a business where Procurement's ongoing evolution is considered a cultural imperative.

Best-in-Class organizations aren't finished with Procurement Transformation. They're committed to carrying out Transformations - both big and small - at a continuous pace. Though they've already got a well-staffed team, cutting-edge tools, and top-notch processes, they are constantly looking for opportunities to improve all three.

The last decade has seen Procurement evolve considerably. There's no reason to expect the coming decade will be any different. Best-in-Class teams have already learned this lesson. Anyone who wants to join their ranks should make haste to learn it as well.

Download Source One's Procurement Transformation eBook to learn more about how your organization can move beyond the buzzwords and enter the function's next strategic era. 
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