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
Jean-Phiippe…..(You may have already done so, however if not) you should create your own Procurement/SCM professional qualification and offer it up to tertiary institutions to teach and award diplomas/degrees for.Your stuff is par excellence!
Many thanks Allan! compliment and advice much appreciated… have now to think about it 😉