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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 fueled by external spend has outstripped the abilities of their ‘historically set up procurement team.’

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 fueled 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 skepticism around value from procurement 
  • Demotivated workforce with limited scope for growth.
  • Poor risk and compliance management

Procurement Operating Model Design Methodology

Efficio helps organizations prevent savings erosion and drive real value delivery through an optimized 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 maximizes the value delivery (cost optimization) but also enables improvement of procurement delivery services to the wider organization in a real partnership set up. This structured approach addresses all elements of the mix for an efficient procurement operating model, and covers:

  • Detailed organization design
  • Resource restructuring and upskilling
  • Process review and redesign
  • Key enablers optimization
  • 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

 

 

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