Profit from Procurement

5OPERATING MODEL: Making It Work in Practice

Documenting the Future Model

Throughout this book we talk about the elements that allow companies to profit from Procurement. And we believe there is significant scope for this—whether that is through setting the right ambition, getting the right team in place, understanding how to execute high quality Strategic Sourcing, measuring savings, making the right technology decisions, and more. Yet there is one element that is fundamental to all these others. It is the foundation upon which all the others depend. Without this element, you wouldn't be able to achieve your ambition, and you wouldn't get much value from your technology. Your team could not reach its potential, and you certainly would struggle to execute Strategic Sourcing well to continue to bring ever more value to your company.

That element is an operating model, and it is the thing that brings and then holds everything together. If you work in a Procurement function, especially a larger one, then it's quite possible you will have documented your operating model. If so, it was probably the result of a deliberate workstream to improve it from a previous state. Your operating model will describe how your people work and what they should do. It describes how they are organized. And it describes how these people interact with technology, data, and processes.

So far, so standard. This is surely not news to anyone. But this is precisely the problem some organizations have with ...