Procurement & Maturity assessment

As a Procurement leader, quite often you come into an organization and want to do a rapid assessment of the overall maturity to decide where to focus first. So, I thought that it would be good to cover at a high-level maturity assessment?to understand what it is, why you should spare the time, and how to approach it.

What is procurement maturity assessment?

Maturity assessment is a structured process conducted to quantify the present maturity level of a specific part of an organization, allowing leaders to clearly identify strengths,?areas for growth and prioritize what needs to be done to achieve greater degrees of maturity. There is no link between firm size and procurement maturity. Companies of all sizes are at different levels of developing their procurement activities. Measuring a company's procurement maturity generally reviews strategic alignment, processes, people, and systems. It can be focusing on one part of the process (Procure-to-Pay) or covering the end-to-end value chain. In any case, starting with strategic?alignment is a must as everything?you will be doing?derives from supporting the company's priorities. Then, depending on your organization and your perception, you can decide to focus on one or all areas.

Why do you need to do it?

The procurement maturity model is used to assist in setting and achieving goals for optimizing business processes in the procurement department, as well as adopting procurement transformation and digitalization across the company.?Understanding where you are, where you need to go, and what you need to do to get there is foundational to any plans you could be developing.

Some recent surveys from well-known organizations highlighted that best-in-class procurement organizations realized:

• 8-10 times higher spend savings than their peers
• 15-25% lower sourcing cycle time
• 50-60% lower supply base size
• 2 to 3 times higher ROI

If you want to improve and build a meaningful plan, an assessment is a must-step. Otherwise, it would be like driving with no idea where you are going.

How to approach it?

You can obviously engage external parties to help you do this assessment. You can refer to my last article on procurement consultancy . Most of those firms can do that and they generally have a very structured approach.

The other option is self-assessment. It will help you initially to kick off the different activities and identify where you should set your attention. Few steps you could be taking:

1.Defining the scope:?

• Source-to-Contract, Procure-to-Pay, including Supply Chain, all or part of it,....
• Strategic alignment, Process, organization, people capabilities, etc... Where do you want to start?

2. Assemble the "assessment team": several options on who you could be involved in this self-reflection. Depending on the organization, the right answer will be different. I would however recommend being mindful of the time it can potentially take and balance accordingly time & benefits.

• Involve all of your leaders or only certain areas or regions
• Expand the group to include people across the organization
• Think about old-timers vs. new joiners?

3.Pull together the review matrix & tailor it to your needs:?

• Plenty of templates are available, from simple excel which people can fill in to building it in a survey tool
• Review definitions for the areas you want to assess
• Define the scale and keep it simple (Procurement Followers, Enhanced Procurement Practices, Procurement Leaders)?

4.Do the assessment: Allow time and run Q&A to ensure consistency on how the different areas are perceived

5.Once you pull together the result defining your maturity level for each area and before going into action mode, make sure you prioritize where you want to focus your effort. It can be done in a team as well to ensure buy-ins (just rank from 1 to 5 what they think is most important for success)

6.Then, the most important is to derive a plan to get to the next level of maturity for the prioritized areas?

I included below a few screenshots to get you inspired on what areas you could be addressing and more concrete details on what you could be looking at.?

If you have only two things to remember, there would be: 1) try to be factual. Even more, if you do the self-assessment on your own, take the time to properly reflect?using a structured approach?and 2) once you did it, prioritize! Diluting your effort?will be detrimental and spreading too thin will just hamper success

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