How To Know When Your Organisation Needs A Procurement Maturity Assessment

If the last few years have taught the world anything, it is that procurement organisations often fail when it comes to addressing unexpected events. If your organisation considers procurement as a department that handles negotiations and purchasing, you could be missing out on savings and strategic contributions.

Today, the role of procurement has evolved and is becoming increasingly capable of adapting to the global business environment. One way to make sure that your procurement function is also adapting and making the right decisions in regard to effective and efficient sourcing is to consider your organisation’s procurement maturity.

But is creating a mature procurement organisation important? Is it something that adds value to your organisation? Can it help you excel further than your competitors? The simple answer is ‘yes’. A 2020 study measured whether organisations with mature procurement functions can overtake their peers and here is what they found:

●        Higher spend savings of 8%

●        Lowered sourcing cycle time by 17%

●        Lowered supply base size by 66%

●        2x higher ROI

Aside from the aforementioned benefits, maturity also helps organisations around the world understand where their procurement teams stand and what they need to do to reach their objectives.

By carrying out a procurement maturity assessment, your organisation can easily identify the areas that your organisation needs to focus on to improve or reach their full maturity. So how do you know if your organisation needs a maturity assessment? Here are some ways you can assess your preparedness.

Subject matter expertise gaps

One of the reasons organisations fall back on their maturity levels is due to a lack of subject matter expertise. As companies and industries evolve, the latest in procurement practices and technologies need to be adopted to meet the current demands.

With the rapidly changing business landscape, many are unable to make these transformations as they do not have the category experts to bridge these gaps in knowledge and skills. Procurement maturity assessments can help you identify these gaps and understand the advancements you need to make to stay updated and optimise the procurement function.

Once you have the analysis you need, you can start using the results of the assessment to acquire a procurement specialist who is aware of the current trends and practices or you can even work with an interim procurement specialist or consultant to help you get on track so that you have the expertise you need to navigate these transformations in real-time instead of catching up.

Increased complexity and responsibilities

The procurement practices many are familiar with a decade ago are not the practices that are implemented today. While some have made the successful transition into adopting new practices and technologies, there are still procurement businesses that rely on traditional procurement methodologies.

With procurement taking on a more strategic facade, the function has become more complex and the responsibilities have also greatly increased. Procurement has evolved from handling simple price negotiations and sourcing to conducting spend analysis, supplier selections, supply market analysis, procurement strategy creation, and more.

All this has forced procurement to become equally as important as any other vital function of an organisation and with the economic downturn that many contemporary businesses are experiencing, procurement has become an even more important component of a business.

Strategic sourcing teams are pressed for time

With the complexities and the responsibilities of procurement increasing, many procurement teams are stretched too thin and do not have adequate time or resources to devote to the functions that require the most attention.

A procurement maturity assessment measures an organisation’s ability to optimise the procurement function and one of the many reasons this cannot be done is due to the lack of employees or lack of time to handle more strategic roles. The assessment is an effective way for organisations to make this determination.

Eliminating tasks that no longer add value or hiring more employees to manage the growing demands of the procurement function are options that organisations can select when they have the right information about their underlying problems.

Procurement maturity assessment—get the support you need to stay ahead

Organisations today cannot afford to be inefficient when it comes to managing people, processes, and technology. The higher up you go on the maturity scale, the more capable your business is of managing spend, making strategic purchases, and improving the bottom line.

Procurement needs to change to enjoy the long-term benefits it offers. If functions cannot keep up with the latest transformation or have already fallen behind, it could end up disrupting budgets and leading to bigger problems.

Working with procurement professionals can help you get the support you need via a procurement maturity assessment that will allow you to create an effective roadmap of where you are and where you need to be.