Beyond Spend Influence: Enabling Procurement’s Emerging Roles in Business Transformation (Part 8) — Beyond Continuous Improvement

This is the last of our multi-part Spend Matters PRO series on transformation, focusing not just on digital procurement transformation, but also a broader supply-aware transformation of the value chain and the business (i.e., spend management and supply management improve business management). In the previous installment, we covered:

• How procurement can use an empathetic, but deliberate, design-centered approach to align with stakeholders and meet them where they are at their many “tables” (albeit virtually given the pandemic)
• The importance of a well-articulated procurement mission and “brand” that coherently communicates and speaks to the business stakeholders, rather than just being a technocratic procurement strategy that simply executes a narrow value proposition.
• Pathways for procurement to be a little more proactive and structured in its transformation approach.
• How procurement can formally “guide” a best-practices spend/supply management process supported by technology that goes beyond tactical “guided buying” processes.

We also featured our procurement adaptation of Amazon’s flywheel (and Covey’s influence model for good measure) before laying out a five stage transformation model with embedded recommendations and emerging techniques and tools that can help on the transformation journey.

But, there is still a chapter to be written here, and it deals with the problem of “the final mile” that links the procurement strategy and transformation to the actual projects in the trenches. When there is poor linkage, here are some of the issues:

• Individual projects are considered in isolation without looking at the bigger picture relative to strategy and to other projects
• Steady state processes are increasingly rare in today’s increasingly volatile environment, but yet, change management is still difficult to estimate and execute
• The use of ‘wave planning’ for prioritizing sourcing projects (i.e., plotting impact vs. effort) is a noble goal, but the technique is less widely adopted across processes, and the methodology for estimating the effort is usually fairly crude
• Speaking of sourcing, too often, the sourcing “intake” process is fairly reactionary and tactical in nature when in fact the opportunities could be made more strategic and transformational if they were better anticipated and coordinated with other efforts
• Too much picking of low hanging fruit projects (i.e., strip mining for savings) without building “transformational muscle” makes it harder to attempt picking the higher hanging fruit with more complex cross-functional (and cross-enterprise) projects

In this last installment, we’ll share a simple five-step transformation project evaluation and implementation process that can be used for digitally intensive projects (or not), strategic projects/programs (or incremental improvements), and for cross-project transformation roadmapping. It will utilize 15 dimensions that can be used to estimate a degree of difficulty for specific projects (e.g. to help plot that wave chart discussed earlier) or for the broader transformation.