A quick look through history shows that transformation goes into overdrive during economic recession. The present dire economic situation is forcing businesses to rethink their current operating structure, and look beyond conventional measures in order to handle challenges to business in an innovative manner. Businesses have seen that the possibility of procurement transformation is not just limited to the conventional cost arbitrage, but efficient management of total spend, which can subsequently directly contribute to the bottom line. Many businesses today are realizing that procurement transformation is a key enabler in achieving corporate goals. For many organizations, procurement is on top of the corporate agenda, together with the function of the chief procurement officer shifting from operational to a more strategic focus. This involves having well defined procedures that include the operational side of procurement, including payment of invoices and managing contracts and suppliers.

Procurement Firms

Consequently, procurement process becomes a key enabler in attaining corporate goals in today’s challenging business environment. It is essential for businesses to evaluate the procurement function in a holistic way. Have a framework in place outlining the procurement processes, strategic direction and key procurement enablers to direct you. Such dimensions are crucial for the successful implementation of any procurement conversion program for purposes of attaining procurement excellence. A winning transformation strategy takes a standardized approach which allows for effective project management, efficient understanding of deliverables, and ensuring quicker results are achieved. This approach ought to be flexible enough to make sure that the expectations and demands of the client can easily be adopted. A business should execute an optimal procurement target working model which includes reporting lines, governance structure, KPI dashboard, detailed roles and responsibilities.

The procurement strategy is at the core of procurement excellence and must be aligned with the corporate goals and plan. Key enabling factors will also be essential for the effective designing and performance of the procurement strategy, and to encourage operational procurement processes. Procurement transformation enables businesses to identify opportunities, realize savings goals, in addition to maximize operational procurement processes. All this is accomplished while ensuring continuing risk and cost management through successful supplier and contract management. An effective conversion strategy will entail identifying a variety of savings opportunities and improvement projects in order to deliver savings and professionalize procurement. Indirect saving opportunities must also be examined and prioritized in order to attain realistic sustainable savings.