Dr Ian George on Procurement Transformation – Scoping the Territory

(We’re delighted to feature another post in the series on Procurement Transformation from Dr Ian George. Ian is a senior partner and practicing consultant at Agile Partners, has an engineering background, and has worked in procurement for the last 20 years. His doctorate looked in detail at procurement transformation programmes).

Procurement transformation programmes have to be ‘of their time’ if they are to stand any chance of being successful. It is the organisation and the surrounding market conditions that dictate not only the nature of the transformation but also the critical few initiatives that will define achievement in the eyes of key stakeholders.

Whilst most of the focus tends to be on the future, the starting point is invariably to understand the present. Benchmarking is an approach often used. Unfortunately, it is often performed lazily with an over-reliance on the numbers and minimal attention to the context. Knowing what other people are achieving is one thing, but knowing how they did it is the real source of insight and opportunity. However, believing you can copy what they did in your organisation and get the same success really is a case of snatching defeat from the jaws of victory.

Another key consideration will be the differences in capability and maturity exhibited across different parts of the procurement organisation. As examples, this could be at business unit, category or staff level. It is generally accepted that ‘one size fits all’ solutions rarely work, so it stands to reason that the same applies to defining the current state.

Knowing what the function can do provides a baseline against which the needs of the organisation can be assessed. The mistake made by many organisations is to ask stakeholders what they want from Procurement. The more strategic approach is to ask what the organisation needs so that the function can propose its own agenda in response rather than being constrained by an organisation that doesn’t see the full potential available to it.

If the proposals resonate with the enterprise and capture the imagination of the C-suite, then the consequences may well be lots of good debate focused on the art of the possible. This also gives insight into the appetite of the organisation to engage with the changes that are being proposed.

Once proposals have been developed it is often a good idea to test them with both senior executives and with key influencers across the organisation – these are not always the same people. If this is done before ‘going public’, it provides a crucial opportunity for refining ideas or presenting them in a way that is more attractive to the wider community.

So far, the focus has been on the procurement function and the organisation within which it operates. But a key factor that will strongly influence all of the above is the type of leader you are and the underlying assumptions and preferences that will drive your decisions. Are you a people leader or a process leader? You really need to know before you do anything else.

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