How to maximize Greenfield Procurement Success

Maximizing Greenfield Procurement Success: The Benefits of Procurement Managed Services

In many young organisations, procurement is decentralised with responsibilities typically handled directly by departments or individuals with budget ownership. As the organisation starts to grow, engagement and reliance upon third parties becomes more complex. Key suppliers are seen as fundamental to the revenue of an organisation and clarity of overall supplier spend becomes more important to the organisations profitability and sustainability.

It is usually at this time that the Finance Director considers building a centralised procurement function, initially to standardise and implement better internal controls but ultimately to reduce costs and ensure the organisation works with the right suppliers. This is commonly known as 'Greenfield' procurement.

Many organisations employ individuals or engage single contractors to build the function, believing this is the least cost, low risk option. However, this approach with limited resource and capacity, usually means it can take time, involve ongoing investment and raises many risks. These risks include potential burnout, with the individual managing multiple workstreams, business continuity and lack of scalability so the true value of procurement is never quite realised and overall ROI is therefore rarely achieved within the first 12 months.

By utilising a managed service provider to build a new procurement function, the organisation can benefit from a function that quickly delivers an ROI but also value beyond just cost savings.

Through a Procurement Managed Services (PMS) model, the organisation can leverage a team of specialists with a wide skill set who are experts in; building engaging policies to help adherence, understanding of compliance and regulatory matters through to sourcing and contract management processes. Having completed similar projects and therefore challenges, implementation using PMS is faster. There is no requirement to start from stratch, with best practice documents and templates readily available, typical issues and risks highlighted and mitigated at the start ensuring minimal impact or disruption. It is also far easier to manage KPIs and SLAs of a managed services provider versus a single contractor.

Procurement Managed Services can offer scable and flexible resource to support the strategic objectives of the business and its growth ambitions.

If you would like to hear more about Novo-K's Procurement Managed Services, then please reach out for further information. [email protected] or DM me on LinkedIn to set up a virtual or real coffee ?