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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 target model. By assessing a business’s existing procurement operating model, defining a set of key design principles and drawing up the future state, we work to co-create a robust and leading practice procurement 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 the mix for an efficient procurement operating model, and covers:

  • Detailed organisation design
  • Resource restructuring and upskilling
  • Process review and redesign
  • Key enablers optimisation
  • Performance measures
  • 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
  • Measurable value-add from supplier relationships
  • Nurture a value-driven, motivated workforce

 

Want to maximise the value from your procurement operating model with additional savings and benefits beyond just cost reduction? Contact Vikas Tyagi at vikas.tyagi@efficioconsulting.com to discover how an optimised procurement target operating model can help.

 

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