Transformation is a scary word. To many, it connotes nothing less than a total overhaul, a metamorphosis, an admission that all previous processes and policies were a failure. Though it aims to inspire change, it often succeeds at doing just the opposite.
Procurement professionals working for leading organizations might scoff at the idea of Transformation. If it ain't broke, don't fix it, right? At the other end of the spectrum, under-staffed and under-resourced teams might hear the word and feel discouraged. Surely, Transformation is beyond their limited means.
In both cases, the Procurement team in question is dead wrong. Transformation is something that every organization can and should actively pursue. Whether incremental or sweeping, ongoing Transformation is necessary for any organization looking to remain adaptable and agile in the face of disruptive changes across the value chain.
Kick-starting the process is as simple as starting a conversation. By listening actively and asking the right questions, Procurement teams at any maturity level can set about instigating a cultural shift. With some effort, they can make turn an inert organization into an innovative agent of change.
Like the journey toward transformed Procurement, this initial conversation will differ based on your organization's size, industry, and approach to Procurement. Looking to build the business case? Here's how Procurement Transformation might fit into your organization's plans for the near future.
Fortune 500 Companies
Businesses at this level are perfectly equipped to let Procurement look beyond cost savings and deliver greater strategic value. In all likelihood, they have the resources to position the function as a driver of digital innovation, supplier risk management, and talent development. The business is probably already dedicated to advancement in these areas, why not offer Procurement a more prominent role in seeing it through?
Fortune 500 to 1000 Companies
Growing rapidly and gaining market share, these organizations are in an ideal spot for reassessing their approach to Procurement. By affording the function a new spot at the executive table and drawing up plans for transformation, these organizations can ensure they hold onto the competitive advantages they've got while adapting to develop new ones.
Organizations of this size have likely tuned their processes for efficiency and consistent results. It's time for them to start looking at the bigger picture and invest in Procurement's people and technologies. By transforming their approach to recruiting and retaining employees, mid-sized businesses can set the stage for evolution enterprise-wide.
Sweeping transformation is probably a reach at this point, but even the smallest business is perfectly capable of inspiring a cultural transformation. At this stage, research and boundless curiosity are essential. By assessing competitors and building market intelligence, small organizations can begin adopting new Procurement best practices and retool their approach to the function altogether. In time, they'll have what it takes to initiate broader transformation.
Public organizations are beholden to different rules and regulations than businesses from the private sector. That does not mean, however, that they cannot learn from these companies. Transformation tactics and best practices could serve these organizations well as they look to improve customer satisfaction and refine their internal processes.
Companies at Risk
A sense of urgency is great fuel for a Transformation. So long as these companies take the time to carefully assess their pain points and plot a realistic roadmap for making a change, a Procurement Transformation could be just what they need to course correct.
These initial conversations could prove challenging. Treating Procurement as a tactical, low-value entity is a bad habit like any other. After years and years, it's not easy to break it right away. Procurement professionals looking to earn buy-in necessary for a Transformation need to come prepared. They must tell a compelling, data-backed story that frames Procurement as a much-needed ally in the journey toward best-in-class operations.
Want help selling your business on Procurement's value? Reach out to Source One's spend management specialists today.