Six Steps to Successful Procurement Transformations – Step 4: Prioritise, Prioritise, Prioritise
This series looks at the key considerations in transforming your procurement function and building a modern, fit for purpose, procurement function. This can look very different in different organisations depending on the goals of the business, the industry, and the maturity of the team. This step is all about prioritisation.
Prioritise, prioritise, prioritise.
Once you have developed your outline list of activities, the final element of building a successful transformation plan is prioritising them. Many times, in a procurement transformation programme, the transformation itself is paid for by the savings that are made from the supply chain. This means that it is key to understand the scale of each of these potential opportunities. This can be balanced with the time and effort required to deliver them and at what stage in the transformation they will be achievable.
To increase the size of the opportunity many organisations look to external cost reduction specialists or industry specific procurement specialists and resource to help deliver these. The benefit of this is that the core team can remain dedicated to the transformation and maintaining existing service levels. But the cost is that key skills are not built up and retained in the existing team. To help prevent this, knowledge retention must be prioritised and strong relationships maintained with the supply chain and internal customers.
In my experience, starting with the envisioning activities, which take less elapsed time and get everyone on board are worth doing first. This should be followed closely by mapping out what the future processes need to look like, which takes much longer. Selection of appropriate technology can run in parallel, but not be implemented until all processes are clearly mapped.
In the next step, I will discuss some ideas on how to help select the best team for your transformation programme to maximise the probability of its success.