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Procurement Target Operating Model

Most businesses inherit legacy procurement functions, which evolved over time without any focus on transformation. Others are victims of their own success where rapid growth fuelled by external spend has outstripped the abilities of their ‘historically set up procurement team.’

Both types of procurement functions end up paying over the odds for goods and services procured because of costly and inflexible internal functions owing to:

  • Suboptimal savings delivery and sustenance of benefits
  • Management scepticism around value from procurement 
  • Demotivated workforce with limited scope for growth
  • Poor risk and compliance management

Procurement Operating Model Design Methodology

Efficio helps organisations prevent savings erosion and drive real value delivery through an optimised and future-fit procurement target operating model. By assessing a business’s existing state, defining a set of key design principles and drawing up the future state, we work to co-create a robust and leading practice operating model.

Our methodology starts with identifying gaps against leading practice and progresses to designing the target state. This not only maximises the value delivery (cost optimisation) but also enables improvement of procurement delivery services to the wider organisation in a real partnership set up. This structured approach addresses all elements of an efficient procurement operating model, and covers:​

 

Detailed organisation design (resource restructuring and upskilling)
Detailed organisation design (resource restructuring and upskilling)

Process review and redesign
Process review and redesign

Key enablers optimisation
Key enablers optimisation

Performance measures
Performance measures

Effective governance
Effective governance

Our credentials

Efficio’s unrivalled expertise in strategic procurement, across all spend categories, direct and indirect, and all types of operation (global, regional and local) enables our clients to:

  • Create compliant spend control with effective risk management
  • Achieve sustainable cost savings
  • Drive measurable value-add from supplier relationships
  • Nurture a value-driven, motivated workforce

 

Fast-tracking procurement transformation at Prisma Medios de Pago
Case study
Fast-tracking procurement transformation at Prisma Medios de Pago

Following a large private equity deal, Efficio supported the transformation at Prisma Medios de Pago, after its acquisition. Read More.

The CPO's view on procurement's talent crisis

To deliver value, new technology requires new skills and CPOs are increasingly finding that their teams don’t possess the skills needed to deliver on their procurement strategies.

Procurement target operating model guide
Guide
Procurement target operating model guide

Download our guide to learn how to maximise value delivery from your procurement operating model and stay ahead of the curve

How the fortunes of Essar’s Stanlow Oil Refinery are changing
Insight
How the fortunes of Essar’s Stanlow Oil Refinery are changing

Essar Oil (UK) CPO Howard Sloane talks about the major procurement transformation currently underway at Essar’s Stanlow Oil Refinery.

Is procurement behind the new wave of innovation in banking?
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Is procurement behind the new wave of innovation in banking?

Three procurement leaders talk us through the current trends in financial services procurement

10 steps to procurement excellence
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10 steps to procurement excellence

The 10 stages that helped media business KNect365 take its procurement performance from ‘basic’ to world-class

KNect365: building a best-in-class Procurement function
Case study
KNect365: building a best-in-class Procurement function

How Knect365's new Procurement function signed off £5.8m in annualised savings in just six months

Three procurement levers of private equity portfolio company growth
Insight
Three procurement levers of private equity portfolio company growth

Leading private equity houses are generating value in their portfolio companies through procurement improvements despite a low growth economy and highly competitive deal market.