Procurement Transformation

Companies are responsible for the environmental and socio-political impacts of their activities. Procurement, with its interface function, is able to realize corporate goals into solutions. This is best achieved through a comprehensive, value-creating transformation of procurement.

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Transformation of procurement – with strategy into the future

The major crises of our time have made it clear that “business as usual” is not a viable option in the long term. Many companies are therefore questioning their purpose and their business model, setting their own ESG goals and thus facing up to their social responsibility. This development gives procurement a new role that goes hand in hand with new requirements. Procurement of the future works digitally, it cooperates closely with partners in the supply chain to drive innovation and achieve sustainability goals, and it makes a strong independent contribution to value creation.

Our experts will be happy to advise you on how to best position your procurement for the future and leverage untapped potential.

Purpose and goals of the procurement department

Employees are more successful when they better understand the goals and purpose of their work. Companies that want to develop should take this into account. When the purpose and goals of the company as a whole change, this must also be broken down and integrated into individual departments.

As CPO, you should be as specific as possible about the need for change in order to transform traditional procurement into a future-proof and powerful procurement. It also makes sense to include the new goals in the incentives for employees. This not only increases individual motivation, but also demonstrates the importance of the new goals.

How we can support you

Adding value through innovation and sustainability

The traditional core areas of procurement are efficient procurement processes, commodity group management, and supplier management. These tasks will remain, but they will be eclipsed in the future by other aspects including: the further development of strategy and competencies and the management of innovation, sustainability and social responsibility. Modern procurement is increasingly taking on interdepartmental tasks that require close cooperation with specialist stakeholders. In the future, suppliers

will be more intensively involved in innovation development. In this scenario, procurement must participate in the planning process at an early stage to approve potential suppliers and to be able to react to changes at an early stage. The topic of sustainability has also significantly increased the willingness to examine and restructure one's own supply chain if required. As an increasing number of countries adopt laws for due diligence in the supply chain, it is necessary to reduce ESG risks that can arise, for example, through dependence on individual suppliers or regions of origin. In addition, many companies are setting their own targets. Procurement will increasingly be faced with the task of analyzing new markets and approaching new suppliers. You can read about the role of procurement in sustainability here.

Digitalization

The COVID-19 pandemic acted as an accelerator for the digitalization of procurement, with many companies finding that a lack of transparency in the supply chain made it difficult or even impossible, to maintain their own supply. The use of digital risk information systems and the networking of information sources have therefore increased significantly. In order to be able to fulfil their role as innovation and sustainability partners

in the future, procurement managers need to be relieved of routine tasks. Digital assistants can, for example, take over the ordering of standard requirements. The benefit of using digital tools must be clear, or employees will perceive the new tools not as support but as a burden. To find out how procurement can be transformed through intelligent digitalization, click here.

Successful employees - training competences

Goals and strategies are important for the development of a company. However, transformation begins in the minds of those who are supposed to realize it. It is important to precisely define the differences between current and future requirements, involve the employees in this process, and identify the opportunities for further development. Our training center supports your team with individually tailored training courses so that they can make the most of these opportunities and ensure the transformation is successful.

Get to know our transformation experts

Philipp Polterauer

Managing Director

office@kgmstrategy.com Contact

David Ring

Managing Director

David.Ring@kgmstrategy.com Contact

Our transformation insights

Magazine

Purchasing has undergone massive changes over the past 20 years - and there's no end in sight.

Study Results

Results of the Procurement Transformation Study 2022

In this year's Procurement Transformation Study, KGM Strategy, together with over 115 participants, shed light on the transformation of procurement in companies.

Client Case

Sustainability and cost optimization as a win-win situation

The aim was to create new structures and framework conditions for procurement, generate significant cost savings and at the same time improve the sustainability profile of the company.