As experienced procurement consultants, we always advise our customers on having a clear picture of the desired “end state” they want to achieve through implementing an S2P solution. This means defining the future structure of their procurement organisation and its role within the business. Starting your procurement transformation journey with this process can make the difference between success and failure.The development of a detailed Procurement Target Operating Model will help define what you want to achieve from your procurement function, quantify the benefits and costs for the procurement business case and provide a useful tool for stakeholder engagement.
Building a Procurement Target Operating Model provides the roadmap for the changeA Target Operating Model (TOM) should reflect the culture of the organisation and be driven by a vision of where the company wants to be in the procurement space. There is not a common recipe for building a procurement Target Operating Model but there are some characteristics that might help you become future-fit:
- Strategic elements such as governance, stakeholder engagement, people and performance development;
- Centralised/specialised, scalable functions, including global processing, e-procurement and spend analytics;
- Transactional activities, e.g. invoicing, purchase order processing and contract management.