Opportunities to improve Procurement Capabilities, Maturity and Performance
While it is obvious that any progressive organization would like to improve their sourcing & procurement (S&P) performance to best in class (BIC) or world class (WC) levels, not many would know the art and science of planning and/or executing it. On top of this situation, there are day to day pressures of meeting supply requirements, supporting other internal mandates and coping up with shortage of procurement skills/people. Whether any organization is in growth or maintenance phase of its lifecycle, this need or desire to meet such challenges remain constant. So what's the way out?
One way out could possibly be to seek external help from a strong partner in procurement who knows not only to measure the as-is situation, but who is also able to present a medium to long term roadmap to achieve breakthrough procurement performance. One important aspect here is alignment of various procurement infrastructure elements (e.g. people, process, technology, knowledge etc.) with other operations/business strategy elements, considering their individual availabilities, capabilities and maturity levels. Alignment and capabilities of procurement elements decide the level of ultimate procurement performance.
Infosys solved such problems for a leading hospital in early 2011 - a 1300+ bedded hospital in Belgium. Infosys S&P experts conducted detailed surveys on-site, administered questionnaires to arrive at statistically significant as-is situation indicators. The road-map to the to-be state was then planned for a 5 year horizon balancing the business needs, investment and ROI goals of clients. For each of the capability improvement phases, incremental benefit streams, organization structures and change management plans etc. were detailed in an actionable, plan vs. actual type tracker. In addition, various sourcing strategies tailored to hospital specific commodities and environments were detailed (e.g. managing physician specified commodities).
The business case forecasted procurement performance elevation to BIC and WC levels in 5 years on parameters like Quality, Cost of procurement operations, Delivery, Savings, Spend under management etc. In addition, the stakeholder value likely to be added was also forecasted. The report was approved by C level executives and implementation is currently on.
So, a great opportunity exists for all firms to invest in something as significant and highly value adding. Such a project can be real quick also, ranging from 1 month to 3 to 4 months to get the business case with roadmap for approval. Would be eager to know views from you and continue the discussion.