Let me start by making something clear: I’m a process guy. I started my career as an engineer on a production line. I have spent the past 20 years working in supply chain, helping clients improve operational efficiency and deliver value in more predictable and repeatable ways. If you ever need a process map for anything, school projects included, ask my kids because I’m your man. So, when my team at WNS-Denali shared the results of our recent benchmark study, I was ready to dive into operational improvement mode. Where did we find inefficiency? How can we help our clients improve performance at scale? I was surprised at what we saw in the findings.
Reading the Procurement Data
What we saw is a tremendous amount of variation. In fact, if you only looked at the findings through the lens of traditional procurement performance models, the data do not lead to very specific conclusions about procurement’s value. So, we decided to flip the analysis model on its head and examine some different correlations.
We focused on two separate benchmark rankings: value and business alignment. For value, we looked at traditional procurement KPI’s: spend under management, savings, process efficiency, and operational excellence. When measuring business alignment, we looked for more subtle trends and indicators of deep stakeholder alignment, effective change management, agile procurement, and adaptive operating models. What did we find? The responses did not point to any single “best” procurement operating model, technology package or spend management process. There was NO PROCESS MAP for best-in-class procurement! Instead, high-performing organizations had one thing in common: a mindset emphasizing tight alignment with business objectives – what we call Total Business Alignment.
Total Business Alignment means intentionally spending time and energy building a deep understanding of the broader business outcomes that procurement supports and adapting and strengthening your procurement capabilities to deliver on those outcomes. Total Business Alignment should influence all facets of procurement operations: from performance metrics to the project pipeline to the talent model.
And now, a different kind of map emerges: The Procurement Ecosystem.
What is a Procurement Ecosystem?
Your Procurement Ecosystem is your company’s specific, highly interconnected business environment. Like any ecosystem, it comprises both internal and external elements. The stronger your ecosystem, and the more integrated the elements, the stronger your procurement performance will be.
Few organizations take the time to consider how connected procurement really is as a business function. Those who recognize this connectivity and prioritize strengthening the ecosystem as a whole, rather than fixing certain elements one-off are those that are performing best in today’s rapidly evolving business environment.
Given these findings, the best thing you can do right now to increase your procurement impact is to take a step back and evaluate your ecosystem. How strong is your organization in the following dimensions?
- Stakeholder relationships and partnering
- Operating model
- External relationships
- Knowledge and capability
- Tools and technology
In a webinar, I discussed insights from the benchmark study and details about how to make your procurement ecosystem work best for you. Specifically, we explored how taking a more holistic view of procurement improves your Total Business Alignment and maximizes procurement’s impact on business outcomes. SIG members have access to the on-demand webinar recording.
Greg Anderson is Senior Vice President of Procurement Services at WNS-Denali. He is a proven expert in Supply Chain and Procurement Managed Services and Technology solutions. Greg has over two decades of cross-industry sales and marketing leadership experience. Prior to WNS, Greg held leadership positions at Ivalua, Pensiamo, Directworks, Tenzing Consulting, SmartOps, Ariba, FreeMarkets, GE, and PPG.