Procurement Agility is a Pipe Dream Without Intelligent Transformation and Procurement as a Service (PRaaS)

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In a previous post, I discussed the three critical focus areas that are foundational to procurement excellence: customer/stakeholder focus, performance and transformation. They seem straightforward, and indeed they are. Unfortunately, it’s hard to get them all at the same time, and get them aligned.

It’s like the old adage about buying a bike where you want it strong, light and cheap — but you can only pick two. Here’s an example to make this clearer, using tail spend management.

Take the 80% of purchases that represent 20% of your spend and you will likely find that the requestors want their stuff (or services) delivered quickly and easily. You as a category manager want that too, and don’t want maverick spending, but you’re also focused on big sourcing deals and can’t get bogged down here, nor have the time to transform your thorny tail spend problem. So, you sacrifice transformation and simply work harder within your current processes, systems and metrics.

But if you’re a more advanced firm and have sourced all of your major spend areas a few times, you may have to lower your procurement involvement spend thresholds, wean yourself off of p-cards and figure out a way to improve your stakeholder satisfaction scores when they find you and your complicated systems and policies a barrier to engaging with you more meaningfully.

So, you need to transform your processes, policies and systems to re-engineer this deceptively toxic and disparate amalgam of spending that is in the tail. More problematic, you need to revisit your procurement KPIs and SLAs (if you have them) to reflect this — especially since you also want to free yourself up to do more strategic innovation and SRM/SCM work.

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