It May Be Time to Transform Your Procurement Ecosystem

Your procurement ecosystem is the backbone of your business. It's made up of all the interconnected systems and elements that affect your procurement performance.

When everything works together harmoniously, your procurement function can drive growth for your company. But if there are any weak links in the chain, it can hold your procurement team back.

Here, we'll explore why it may be the right time to transform your procurement ecosystem. We'll also discuss how you can make positive changes and investments to turn your procurement function into a revenue driver.

Procurement Operating Models Are Ready for Transformation

Transforming your procurement ecosystem requires more than an investment in new technologies. In most cases, you'll need to conduct a full accounting of all your solutions to determine how effectively they work together. During this process, you may discover disconnects between some of your systems that cause data silos or other types of inoperability.

However, you may also wish to take a hard look at your operating model.

According to a recent report sponsored by WNS Denali, 42% of procurement leaders believed their operating model was the area of their procurement ecosystem that required the biggest transformation and improvement in 2022. In each case, fewer than one-third of the respondents said the same thing about their digital enablers and their talent management program.

The report also found that almost one-third of company leaders (30%) don't view procurement as a growth enabler that adds strategic value to the business. Instead, these leaders still view procurement as a necessity for business operations. This can make it much more challenging for the function to obtain the buy-in it needs to make strategic technology investments and transform.

Why It Might Be Time to Transform Your Procurement Ecosystem

The traditional, linear procurement process is no longer adequate in today's fast-paced, constantly changing business environment. To be successful, companies must be able to adapt quickly to market changes and new opportunities. That means procurement teams must also be agile enough to pivot when necessary.

An agile procurement operating model can help the function keep up with the ever-changing business landscape. It also enables you to be more strategic in your decision-making and better equipped to take advantage of new opportunities as they arise.

Nonetheless, transforming how the procurement function operates also requires leaders to take a hard look at their technology ecosystem. They must also analyze their procurement processes to ensure they are efficient and supportive of change.

If you're not sure whether your procurement ecosystem is ready for transformation, consider these signs:

• Dependence on manual processes and paper-based documentation
• The inability to take advantage of new technology quickly
• Challenges when competing and negotiating for supplier contracts
• Data silos and bottlenecks

Reaching a successful procurement operating model requires the function to coordinate a transformation across multiple dimensions, not just technology.

How to Transform Your Procurement Ecosystem

The first step toward transformation is to take an inventory of all the technologies and solutions currently in use. This will help you identify any disconnects or inefficiencies between systems.

Once you have a clear picture of where your procurement ecosystem stands, it's time to make decisions about which elements need to be updated or replaced. You may find that some solutions are no longer effective or support your new business goals. In these cases, you may need to invest in updated technologies and solutions that can help you achieve your objectives.

You'll also need to make changes to your procurement operating model. This may include adopting new processes or modifying existing ones to enable the function to move faster and be more agile. 

Finally, it's important to invest in the right talent. The right mix of skills and experience can help you drive transformation and enable the function to reach its full potential.

Enacting Procurement Transformation

Achieving a successful procurement transformation requires a coordinated effort across multiple dimensions. But if done correctly, the benefits can be significant. A transformed procurement ecosystem can help your company be more agile, adaptable, and successful in the ever-changing business landscape.