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10 Step Procurement Transformation, Part I
PurchTips - Edition # 161
September 23, 2008
By Charles Dominick, SPSM
How Do You Transform A Procurement Organization?
Your procurement organization is expected to continually deliver more and greater value to your company, but how? This step-by-step guide will help you transform your procurement organization into a world-class operation. Best of all, these steps can work for anyone, irrespective of department size or industry!
- Define the Scope of the Procurement Transformation - What is going to be different a year from now? Your organizational structure? The technology used? The supply base? What else? Make sure your goals are aligned with senior leadership's expectations for the transformation.
- Establish a Baseline of Your People, Processes, and Technology - How many of your people are degreed or have professional certifications? What percentage of your spend is under contract and how is your contract compliance? Document key findings and statistics of the current state to help assess the future progress of your transformation.
- Conduct a Gap Analysis and Develop a Transformation Plan - Prioritize the transformation initiatives on your plan by effort and impact. Target easy wins first to build momentum. Removing trivial annoyances such as ill defined category or contract responsibilities will help you to quickly gain the trust of the procurement team.
- Develop Key Stakeholder Relationships - Review your procurement transformation plan with key leaders to garner support and ensure organizational alignment. Seek their feedback on potential roadblocks. Be sure to discuss intended benefits of changes to organizational structures or company policies first, to avoid hitting a barrier later.
- Set Service Level Expectations - Avoid over promising at this point as you could lose credibility and support that is vital to success. Convey that service levels may decline briefly before increasing dramatically. Gain alignment on the transformation methodology you'll use, rather than arbitrary dates.
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