The Rise of Procurement Excellence

A few summers ago the Aperol Spritz was all the craze in Stockholm, Sweden.  

Bubbly, juicy, fruity, slightly bitter, slightly sweet. It was the unanimous, yet unspoken, number one drink choice for a steamy summer day. 

Sometimes trends last for the summer and die out, but the Aperol Spritz has held its pole position on the summer drink lists at just about every bar in Stockholm, Sweden.  

I recently saw a list of attendees for an upcoming procurement event and realized that there was a new trend in procurement functions/job titles. Procurement teams have increasingly appointed program, process, transformation, change, and excellence managers to serve as their Sherpas on the climb towards new heights of digital transformation. Read more here about Change Management in Procurement: The Digital Transformation of SCM.

Procurement wants to become excellent; within technology and talent. Procurement excellence teams are those that have been tasked to lead this transformation.

So… is the procurement excellence role just the trend of the summer, or will it follow in the footsteps of the Aperol Spritz and make its way into the regular rotation?

To reach ambitious goals in the coming years, many Procurement teams need to transform, adopt new technology, leverage supplier bases, evolve processes, and reposition their function; from being seen as a cost-saver to being seen as a value driver. 

Welcome to the rise of Procurement Excellence!

What is Procurement Excellence?

In an article from Supply Chain 247, it was hinted that the definition of procurement excellence is a bit of a moving target. 

“For Robert Rudzki, procurement excellence is about understanding corporate leadership’s expectations for the function—regardless of how basic or how advanced these are—and then meeting those expectations. For Philip Carter, procurement excellence is about managing risk. For Robert Monczka, it’s about improving competitiveness. For Timothy Fiore, procurement excellence is about aligning with overall business objectives and then collaborating around those objectives” (Atkinson 2013).

One thing is quite clear: Procurement excellence serves as a liaison between the procurement organization and the broader corporate leadership. Procurement excellence teams and managers often take on the tall task of ‘selling in’ the value of procurement and following through on targets & initiatives in procurement that align with the broader business strategy. 

Procurement excellence requires the capability to be an agile & cross-functional chameleon, driving projects & initiatives, serving the best interests of procurement, whilst educating & inspiring other stakeholders in the broader organization about the importance of procurement as a function. 

Procurement excellence is the cheerleader, the coach, the athletic director, the equipment manager, and the groundskeeper. A Procurement Center of Excellence (CoE) is the function’s playing field. The CoE is responsible for perfecting every aspect of the playing conditions, so their procurement teammates or the ‘players’ (category managers, strategic sourcing managers, procurement managers) have a greater chance of success. 

As put by Omer Abdullah of The Smart Cube in a guest article for Future of Sourcing, 

“CoE should be performing key activities, such as:

• Disseminating knowledge in the form of best practices, market intelligence and more
• Looking for opportunities to promote collaboration across category teams
• Acting as the clearinghouse for processes, methodologies, models, etc.
• Optimizing and homogenizing operations and processes, where appropriate
• Focusing on enabling innovation and continuous improvement
• Establishing and maintaining the metrics and mechanisms to monitor and measure performance and success
• Providing targeted management support on key strategic initiatives”

Excellence teams should be facilitators and teachers, responsible for sharing knowledge and defining what excellent means to your procurement team!

Learn more about 7 Common Signs of Excellent Procurement Teams

From Generalist to Specialist

Procurement is currently in a transitional phase, organizationally; we’re entering the age of the specialist. 

This is particularly true in procurement functions focused on digitalization, risk management, and sustainability (ESG). 

A trend Kodiak Hub has spotted for 2022 and beyond is continued functional remodeling, where networks of specialists and supporting roles will work parallel - directing traditional procurement staff - driven by broader insights and initiatives. 

Excellence teams will be increasingly sought after to facilitate this transition.

In the 2022 CPO Compass report by Procurement Leaders, 46% of CPOs surveyed that they “plan to create new roles & responsibilities in the coming year” (Procurement Leaders). 

Some of these roles are specialist/competency functions, whilst others are enabling roles focused on upskilling and empowerment. 

These shifts in more traditional roles align greatly with many within the procurement industry’s ambition to drive top-line growth, as procurement continues to become an increasingly business-critical and primary function in broader organizational value chains.

This shift will require a recalibration and harmonization of teams. 

“Finding the balance between hiring dedicated experts and broadening the scope of existing procurement roles is difficult. While focused roles can provide deep domain knowledge and capacity to complete initiatives, they often lack the procurement expertise, market knowledge, and internal alignment that generalists in traditional category roles offer.” (Procurement Leaders, CPO Compass 2022)

Just because procurement excellence teams’ and specialists’ stock is rising doesn’t mean that traditional roles are going anywhere. Excellence roles may have more inherent technical, transformation, analysis, and/or change management skills, but your procurement team’s generalists are likely more well versed in traditional category management, supplier relationship management, tendering, negotiation, and supplier development. Check out this article on Procurement's Most Valuable Players.

Procurement Excellence: Here to Stay

Procurement excellence poses traditional procurement roles with that extra set of helping hands they’ve always needed, but may not have known they needed. Kind of like pulling on a warm pair of socks. Until you put them on, you didn’t even realize your feet were cold.  

With this, we believe it’s safe to say that Procurement Excellence is here to stay.