Going into a transformation without objectives would be a perilous undertaking – you might just end up with what you wanted!

The expectations you should be setting would typically include:

·         A strong working relationship with the business and the users – they call procurement to the table early on, welcome their input, take their advice. They become a partner in executing their strategy, aligning the right supplier working under the right agreement

·         Predictable and effective processes to run procurement activities – users know how long it will take, what they must do, what they can expect

·         Clear articulation of the benefits sought, and an objective evaluation of what was obtained – an agreed business case and post evaluation for each initiative, from a simple odd-ball PO to a complex outsourcing deal

·         Fair risk management through contracting and ongoing relationship management

·         Both the business and the supplier held to account on their performance and compliance with the agreements reached

·         Becoming a customer of choice for the suppliers you want working for you

·         Bringing more and more of the spend under control, generating more and more palpable benefits from rigorous contracts with suppliers that know what they must do, and want to do it

In a nutshell, having the right suppliers engaged on the right terms.

And then what?

The way things seem to be going is that purchasing might get sucked back into the businesses, using standard processes and automated tools to execute the mundane purchasing activities. While this vision is compelling, it is probably most applicable to the low risk, low complexity purchases, those that would take this highly efficient procurement process “six-lane highway.”  This is already happening to a certain extent with ePurchasing – the items are catalogued, the terms are agreed, and the end-user orders what they need directly from the supplier. The system takes care of routing approvals, checking budgets, assigning the right prices, attaching the relevant T&Cs, tracking service and compliance. And some organizations have pushed this quite far.

The complex deals are where real procurement horsepower must be brought to the table, like complex outsourcing, offshore, joint ventures or innovation initiatives, complex inter-dependencies with sales and marketing. They will require the full brunt of what procurement can bring to the table. There will always be the need for deep expertise and experience. In some organizations, this may no longer be kept in-house – imagine engaging strategic procurement advice externally for the handful of deals that warrant bone deep talent. And imagine the rate this value would command!

We may have a long way to go before this becomes a reality…