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True Procurement Transformations, Part II


PurchTips - Edition # 270

By Charles Dominick, SPSM, SPSM2

 

Is Your Procurement Transformation Plan Complete?

In PurchTips Edition #268 (http://tinyurl.com/c9ytcaq), I shared three of the seven areas that I feel should see major changes after true procurement transformations: staff, supply base and stakeholder relationships. In this edition, I will share the remaining four.

  1. Technology - There comes a time when old tools are obsolete. Adopting new technology is key to harnessing all of the productivity improvements available while keeping up with suppliers who are changing the way they do business to match how they interact with their most tech-savvy customers.
  2. Tasks - After a procurement transformation, the procurement staff should not be doing the same things they did before. They should be spending their time on the tasks that generate the most return on investment for the organization. As such, low-value tasks must be eliminated, delegated, automated, or outsourced and replaced by tasks that have more value to the success of the organization.
  3. Metrics - A procurement transformation will often result in measuring different aspects of the procurement department's performance. Perhaps the procurement department was measuring things it didn't need to measure or measuring too few things. Sometimes, a procurement department is measuring the right things, but just not performing well enough, which segues into our final point.
  4. Results - A procurement transformation is an expensive and resource-intensive initiative. So, it better be worth it! After a transformation, the procurement department better be able to show how it has improved. If using the same metrics as it did before the transformation, it should show more favorable numbers. If using new metrics, the numbers should value being added in ways that it wasn't prior to the transformation.

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