Despite the best of intentions, most Procurement Transformations come up short. Organizations are so eager to realize the benefits of an initiative that they often lose track of their end goal. In some cases, they neglect to establish these goals in the first place.  Those organizations that succeed recognize that it is vital for internal stakeholders at the organization to think about not only what they want to achieve in this transformation, but also how they are going to go about carrying out this change. That’s why so few initiatives succeed and so few organizations  have realized the full strategic benefits of an advanced and efficient Procurement team.

Joe Payne, Source One’s VP of Professional Services, believes that the first step in any transformation is asking, ‘Why?’ Until fairly recently, Procurement functions were an afterthought within most businesses. It was, typically, not engaged until leaders opened the books and learned how much they were spending across their supply chains. That is when they’d start to think about Procurement and suddenly call for change. Often, carrying out change would entail little more than going to suppliers and demanding lower costs. And while this may have worked in the short term, it could not fix the underlying issue, the nature of their Procurement function.

So how can high-level managers transform Procurement? By changing their mindset.
Contradictory as it may seem, Procurement transformations are less about Procurement itself, and more about an organization-wide change in mindset. Organizations can’t just come down on their procurement team and demand better results. They should instead focus on implementing initiatives that will result in something more long-lasting than a temporary price cut from suppliers. Procurement does, however, need to take the lead in finding a process that the whole organization can buy in to.

Instead of trying to insist upon a standard process, Procurement has to emphasize flexibility in your transformation. There’s nothing productive about saying, “here’s a standard approach we will use.” A more constructive approach would see Procurement ask itself and stakeholders from across the organization, “How can we approach this in a way that makes sense for our entire organization?” While some Procurement departments are more advanced than others, no one department has figured out everything there is to know. Even best practices and optimized processes can use some improvement.

Getting on the same page with internal stakeholders is vital to the successful implementation of a transformation. Active listening and an understanding of every stakeholder group’s end goals will provide the best results. These stakeholders are more likely to cooperate with Procurement if they understand the role they play in the project and the potential long-term benefits. Procurement should encourage them to view the initiative as more of a company-wide strategy implementation than a ‘procurement transformation’.

Having the right mindset is supremely important in fixing or optimizing a broken or inefficient Procurement unit. Trying to find a “quick fix” by bringing the hammer down seem to help in the short run, but will never address Procurement’s problems at their source. Remember, Procurement Transformations do not occur overnight. Take the time to understand your organization’s goals and how each stakeholder will bring them about.
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Michael Eveland

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