Procurement maturity is increasingly becoming holistic and integrated — as is procurement technology. No longer can we think of maturity models for various areas of the function (or the use and adoption of solutions) in silos. Step change improvement comes from thinking of the whole, not the parts or even the sum of the parts. In short, we must ideally think technology and process maturity in terms of end-to-end integration, including the overlap between buying, transactional connectivity, supplier management, supplier portal/connectivity, payment and more.
Whether these are completely integrated or “virtualized” is less important. What matters is how procurement provisions these capabilities to the business, and, outside of strategic procurement activities (e.g., sourcing, supplier development, make or buy analysis, product design/collaboration, etc.), how we strive to capture, influence and continuously improve how spend is managed. Yes, the method matters. But we can’t discount “quality” of “quantity.” Both matter and 100% enablement and capture should be the ultimate goal.
It’s also important to consider how procurement maturity benefits accrue also a continuum and tie back to overall objectives and charter. In other words, as firms become more mature in their use of technology, procurement’s overall charter and the way in which the function is measured (beyond just cost reduction) is likely to change as well.
The diagram, below, explores how procurement objectives tend to evolve in step with how technology is not only used, but how it is viewed in the context of organizational enablement.
As always, I welcome your feedback on the topic. Stay tuned as our analysis of the topic continues.
This post is based on content from the Spend Matters Perspective Reframing Maturity Models: Empirical Perspectives On Radically Improving Procurement Performance.