Dividing the Procurement organization into a strategic and operational part is very common. However, it is still common to find that the process interface between these two parts has not been considered to the extent it deserves, resulting in two separate processes and disconnected information flow between.

A Procurement Done Right functions of today needs to balance the instituted cost focus with possibilities to leverage the supplier base to add value. A Category Management approach is a proven methodology to use for cross-functional teams to address spend categories with the objective to optimize cost. A more collaborative approach with Supplier Relationship Management is a great way to balance the cost focus with possibilities to drive improvements and encourage innovation.

Companies are facing more challenges today than ever and Procurement can be part of the strategy to handle these challenges. Procurement could play a center role in increasing competitiveness by e.g., mitigating cost increase, securing sustainability targets, enabling digitalization on company or functional level, and ensuring a flexible supply chain. When Procurement is Done Right, the Procurement Strategy is an integral part of and aligned with the overall business strategy.

As the maturity of the Procurement organization increases there is a clear move to a more centralized operating model to ensure economies of scale and skill. However, there is a risk that this model increases the distance to the actual business.