Source One’s latest whitepaper series takes a close look at each of Procurement’s essential pillars. In addition to tools, metrics, and talent management – Building an Effective Procurement Organization offers insights for optimizing Procurement’s role. The final installment in the series offers insights for outlining Procurement’s vision as well as optimizing the way stakeholders perceive the unit and interact with it. It concludes with perhaps the most essential piece of all, Procurement’s functional maturity.

 Check out a preview of Source One’s dive into Procurement maturity assessments.

Tactical/ Transactional

The tactical/transactional approach to Procurement is a straightforward process that’s far more reactive than proactive. A tactical Procurement unit makes its decisions based on fewer criteria and typically carries out initiatives on an as-needed basis. This approach grants low strategic value and is more useful for short-term projects. When stakeholders engage with these Procurement teams, it’s not usually because they see much value in it. More often, it’s because they’ve got no other choice.

 Sourcing/Shared Services

These groups are slightly more mature than Procurement’s purely tactical groups. They’ve proactively analyzed the market and make purchasing decisions with more understanding and insight. They provide an opportunity to increase efficiency by organizing resources that are shared among other business units. At this stage, however, they still often embody outdated ideas about Procurement’s value that stakeholders won’t always see past.

Category Management/Supplier Management

Procurement groups at this stage display strong decision making initiative, drive change well after purchases are made, and exert control over their processes. Their expertise and strategic know-how aid in determining how and why the company makes its decisions. Procurement groups that function as category and supply managers simplify and optimize the go-to-market process and ultimately generate greater value. They’re also a trusted advisor throughout the life of vendor relationships.

Integrated Demand/Supply Management

These are the rare Procurement groups that play an essential role within their organization. They’re a valued asset with a hand on every link in the supply chain, due to their management strategies and advanced analytical capabilities. An impressive feature of these groups is that they continuously improve because of their ability to assess market demands and devise quick responses. The collaboration among internal and external departments allows for increased efficiency across the organization. Their culture of growth plays a crucial role for refining their processes, which better serves the business and ultimately earns a seat at the executive table for Procurement.

Whatever Procurement's maturity model within your organization, Source One’s specialists offer insights to support its needs. Download all five parts of Building an Effective Procurement Organization today to learn more. 
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Christopher Ivie

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