Sourcing & Procurement framework for Best in Class

If you are in the exciting process of  setting up your Journey for a Best in Class Purchasing organisation , you’ll need a Vision, a structured Approach and right Priorities, namely a Sourcing & Procurement framework. I like the one presented in below chart. It splits the focus in 5 key work streams  (Organisation, content, Process, Data and Technology)  and highlighs for each of them 4 to 5 areas which are currently high in CPO agendas and to be considered as key success factors for being Best In Class (BIC):
Organization

  • Separation of strategic, tactical and transactional activities > optimisation of manpower costs
  • Shared / Integrated business services > Standardisation, simplification, aggregation, resource utilisation optimisation
  • Global Source-to-Pay process owners > Need for an overall accountability for strong outcomes
  • Governance across Procurement and Finance > Procurement shall team up with Finance to get the governance working
  • Process led Source-to-Pay function > Process Compliance is key

Content

  • High content coverage of spend (catalogs, contracts, preferred suppliers) > going digital…
  • Utilization of externally available content > leveraging external content to enrich own
  • Content creation embedded in sourcing process > Learning from past activity injected in sourcing process
  • Continuous improvement embedded in spot buying > Use analytics to improve your Tail Spend Management

Process

  • Category specific buying channels > Different set of channel from ‘self enabled’ (less efficient) to automated (cheapest)
  • End-to-End Source to Pay process > A process designed from an End to End perspective
  • Self Service Processes > Impossible to avoid that channel so better have it right
  • No Po – No Pay policies > Sound obvious, still not applied in all fortune 500 companies
  • Internal and external collaboration > IT enabled

Data

  • Harmonized master data (Suppliers, data) > No accountability/aggregation transparency otherwise … Go Big data
  • Harmonized spend / budget structure > same as above
  • Centralized data repository > Centralising is a great step for harmonization
  • Efficiency , Savings & Compliance measurement > the right dashboard and Analystics to ensure outcomes

Technology

  • One stop shop Buying portal > Make requisitioner life easy, they’ll bring compliance up
  • Integrated source-to-Pay technology > avoid duplications and saving time and effort
  • Value adding mix of “in the cloud” and “on premise” technology > Not ready yet for full cloud so get a balanced system landscape
  • Procurement analytics and reporting > Required for above success
  • Supplier enablement technology (incl. supplier networks) > Make Supplier life easy, they’ll bring value vs  sorting out admin issues

Sourcing & Procurement framework

 

2 Comments

  1. Allan Wright octobre 1, 2014
    • JP Massin octobre 1, 2014

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