Procurement Transformation: How Fast (if you want it to last)?
March 17, 2017
“We benchmarked Company X, and learned that it took them 7 years to transform their indirect procurement activities to world-class. And, there was a big consulting firm involved.” That’s a quote from a meeting I attended, and the speaker was interested in my reaction. Company X was identified, and is a well-known company in its industry. The large consulting firm that was involved over most of those 7 years was also identified.
My reaction to this statement is straightforward: lacking a transformation roadmap, with clear milestones and deliverables, it can take a long time to achieve successful transformation of your procurement activities and capabilities. This is true for both direct and indirect spending. In fact, without a comprehensive roadmap, genuine procurement transformation is probably not achievable in any reasonable amount of time. On the other hand, with a well-constructed roadmap, it is possible to achieve a great deal within 12 to 24 months, including the transfer of knowledge to your team and the significant enhancement of internal capabilities and processes.
But a transformation roadmap is not the only key ingredient on the journey to world-class procurement and supply management. To obtain enthusiastic senior management support and involvement, you need (among other things) a well-constructed business case that lays out what you expect to achieve, and when you expect to see those results, in exchange for the resources (investment) you will require to accelerate that journey.
In a nutshell, to gain senior management’s attention - when they are probably faced with multiple, competing priorities - it is necessary to show them the potential Return on Investment (ROI) achievable from procurement transformation.
To read more about building a transformation roadmap, you can download the white paper available on our website:
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