Procurement transformation is a tried and tested method to develop a professional and high-performing procurement organization. Enterprises typically leverage the help of external consultants or other specialists to benchmark their starting position and develop a strategy, organizational model, policies and processes, as well as systems and capabilities to transform their procurement organization into a proactive, value-adding function. The business case for this effort usually is built on strategic sourcing — a robust way of delivering bottom-line savings that guarantees a solid return on investment to satisfy even the most skeptical of CFOs.
Many procurement organizations in market-leading enterprises across the world already have been through this type of transformation, and consistently are making meaningful financial contributions to the wider business. However, for a CPO leading such an organization, the new challenge becomes: What’s next? Continuous improvement, of course, is part of the answer — delivering somewhat more with somewhat less each year — but is procurement really just a one-trick pony and is there only one leap forward possible? Savings delivery, unquestionably, is the bedrock of any procurement organization –– but CPOs in mature procurement organizations should focus on the next leap forward, a second-generation procurement transformation.