Accelerating the Impact of Procurement Centers of Excellence
“Procurement is starting to see value as a path forward to a strategic, consultative role. And companies are structuring their Procurement organizations to deliver this mission.”
- Charlotte Spencer-Smith, The Rise of the Procurement Center for Excellence
Last week, I read and shared an article from Pool4Tool on the growing role of process efficiency through procurement Centers of Excellence. It resonated with me because we have been asked a related question by teams all over the country – how do we reduce or automate tactical tasks in order to increase procurement’s strategic impact?
We recently heard from a procurement team that 30 to 40% of their time is used to manually search for information. We heard from another team that their existing systems only give them about 60% of the data required to initiate a sourcing event – again, requiring them to manually search for and gather the other 40%.
There is a double swing benefit when procurement improves their efficiency:
- Current projects are completed faster, increasing speed to results
- AND additional opportunities can be pursued to bring more spend under management or invest in supplier relationships, innovation, or value creation.
Process improvements are important, as is technology, but access to information – up to date, trusted information – holds the greatest potential to simultaneously improve procurement’s efficiency, impact, and influence. It is easy to say that procurement has access to all the information they need, but if the time and effort required to locate and validate that information becomes a barrier to progress, procurement’s results will be affected.
The last place procurement should tolerate inefficiency is in the information gathering process. Procurement creates value based on the information they gather – not in the collection process itself. There is no added benefit to suffering through a frustrating process when a more efficient alternative is available.
Those two teams we spoke with last week were being slowed down by the process of searching multiple sites for information, none of which were probably optimized for their specific purpose. tealbook, on the other hand, was designed to connect procurement with information about current and prospective suppliers faster so that the value-added work can get underway sooner.
It can take 1 to 6 weeks or more to complete supplier discovery. If procurement can either reduce the total active time required to complete this activity or compress the elapses time, they can deliver results sooner or address additional opportunities.
Procurement has proven that they can maximize their impact when organized as a Center of Excellence –increasing their efficiency and scaling their impact. As Charlotte Spencer-Smith points out, Centers of Excellence are not just an improved way to achieve procurement’s current goals, but to transform the function into a strong source of innovation and value creation for the future.