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Procurement strategy

A procurement strategy is not a list of savings targets. It is the answer to where procurement plays, what it is accountable for, and how it supports what the organisation is trying to become over the next three to five years.

10-25%cost savingsacross managed categories
50-75%faster cyclesin sourcing and tendering
90%+supplier performanceimprovement on managed vendors
100%policy compliancedocumented and audit ready

The problem this solves

The strategy is written inside procurement, for procurement. It opens with maturity models and category matrices, and nowhere states what the business is trying to achieve or how procurement changes the odds of achieving it. The board reads it once.

Procurement is measured on savings alone, so it optimises for savings alone. When the organisation actually needs speed to market, supply resilience or in-country value, the function has no mandate to deliver any of them and no measure that rewards it.

Nobody has decided where procurement should not play. Without that, the function spreads itself across every transaction, and the categories that would repay real attention get the same thin treatment as stationery.

What we actually do

The steps, in the order we run them.

How the engagement runs1Start from the businessstrategy2Establish the currentposition3Define the mandate4Design the operating model5Set direction and measures

  1. Start from the business strategy

    We read the corporate strategy, the operating plan and the board papers, and interview the executives procurement serves. The objective is a short, honest list of what the organisation must achieve, in its own language rather than in procurement's.

  2. Establish the current position

    Where the function genuinely stands on spend control, capability, data, technology and supplier relationships, benchmarked against comparable organisations rather than a global average.

  3. Define the mandate

    What procurement is accountable for and what it is not, agreed with the executives who will be asked to honour it. A mandate nobody outside procurement has signed up to is a wish, and it is the single most common reason these strategies fail.

  4. Design the operating model

    Centralised, devolved or hybrid, category ownership, delegation of authority, the shape of the team and the technology underneath it. Designed for the organisation you are, not the one an operating model diagram assumes.

  5. Set direction and measures

    Category direction, supplier strategy, capability plan and technology roadmap, each with the measure that tells you whether it is working. Measures the CFO recognises, not procurement-internal metrics.

What you get

The strategies that survive are the ones where the mandate was negotiated with the business before the document was written. A strategy procurement wrote alone describes a function the rest of the organisation never agreed to fund.

Questions we get asked

What is the difference between a procurement strategy and a procurement plan?

Horizon and altitude. The strategy sets direction over three to five years: what procurement is for, how it is organised and what it must deliver for the business. The plan turns the next twelve months of that into a sequenced pipeline with dates, owners and targets. Most organisations need both, and the plan is close to worthless without the strategy above it.

How is this different from your procurement advisory service?

Procurement advisory starts from an assessment: it scores the function against ISO 9001 and ISO 20400 and produces a gap-closing roadmap. Strategy starts from the business: it decides what the function should be for in the first place. If you know the direction and want to know the gaps, take advisory. If the direction itself is the question, take strategy.

How long does it take?

Six to ten weeks for a mid-sized organisation, most of which is stakeholder work rather than analysis. The document is quick. Getting executives to agree a mandate they will honour is what takes the time, and skipping it is what makes the document worthless.

How often should it be refreshed?

Reviewed annually, rewritten when the business strategy changes materially. A procurement strategy written against a corporate strategy that has since been replaced is actively misleading, because it points the function at objectives nobody is funding any more.

Who needs to be involved from our side?

The CPO or head of procurement throughout, and meaningful access to the CFO and the business leaders procurement serves. If the executives will not give time to agreeing the mandate, that is worth knowing early, and it usually tells you something about the mandate.

Where to start

Run the free procurement maturity diagnostic for a scored view of where the gaps are, or talk to a consultant about this specific problem. Both take less time than a meeting about having a meeting.

Talk to a consultant

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