Implementing your Procurement Strategy Effectively

Procurement Professionals regularly face a battle to implement even the best and most comprehensive of strategies, especially when they require process or behavioural change in the wider business, as good strategy always does. How can procurement managers gain the buy-in and participation from other departments to successfully implement their strategies?

One of the biggest sources of frustration among proactive strategic procurement professionals is the failure to translate fantastic strategy into fantastic results.

Again and again, buyers can demonstrate the value potential that lies in making organisational change, but are unable to realise it when they try to implement it across firms.

Great strategy is no substitute for great engagement

Among the main reasons that a good strategy fails are lack of engagement, insufficient resource allocation and timeliness.

In the vast majority of organisations, the single most effective way of remedying all three issues is to be sure to engage the appropriate level of management in the category plan/strategy inception.

A simple, effective and robust method of doing this is to utilise a gateway process to achieve cross-departmental buy-in in a formal and logical way. This gateway process can also be used to request and achieve sign off on the levels of resource required to follow the category plan through. This may also negate the need for individual business cases for each change vs current process that the strategy may demand.

Speed of implementation is important

Procurement practitioners will likely be well acquainted with the concept of transformational vs phased change.

Whilst the merits of both should be considered for any given strategy, a transformational implementation is generally advocated rather than a phased approach.

This allows the benefits of the strategy to be realised at an earlier stage, which is not only of value to the bottom line, but may increase engagement in the strategy itself.

In reality some aspects of the implementation will always be phased, such as any honouring or terminating contractual agreements and shaping internal processes. A common example of this is where the strategy commands aggregation of requirements, as normally suitable criteria for bundling will need to be developed in conjunction with technical stakeholders, particularly in direct procurement environments.

Identify, execute and communicate quick wins

In order to target the most effective aspects of strategy early in the implementation phase, an impact vs effort matrix should be utilised such as the one shown below.

This helps firstly to prioritise the plan and move from quick wins through to strategy implementation. Secondly, the progress made with the quick wins serves to inspire the involvement, engagement and above all belief in the effectiveness of the plan. This belief is extremely powerful if it becomes widespread among seniors in an organisation.

Power to the people

Having people with the right skills in order to implement change is also critical to the successful implementation of any procurement strategy.

It is essential to utilise people with strong interpersonal and convincing skills in order to find the right way to ‘sell’ the benefits of strategy to stakeholders. For example, selling the benefit of lower inventory to a factory manager not on the basis of reduced cost, but on increased flexibility if space can be freed to hold spares from several manufacturers.

This is particularly important as several of the category or procurement strategy elements may encounter resistance from stakeholders.

One major issue in implementation is any change which effectively questions the necessity or value that part of the business brings. Change here would usually either trigger widespread re-training, recruitment or indeed obsolescence of the function. This is guaranteed to be highly controversial and is likely to prove difficult to gain senior stakeholder support for.

Embrace feedback and work to continuously improve

The final piece of the puzzle within the procurement strategy is to establish a forum or touchpoints for continuous review and improvement.

Regular readers will be aware of Progress Procurement's advocacy of continuous improvement and category strategy is no different.

In order to capture relevant and timely change, it is a good idea to provide a forum for day to day feedback, perhaps anonymously. In addition a formal yearly review should be undertaken to measure the success of the category strategy against what it set out to achieve and to evaluate potential changes that could be made moving forward.

Ensuring effective implementation is considered as part of your procurement or category strategy can be the difference between value wasted and value created in your procurement functions.

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