THE BUSINESS REVIEW FOR PROCUREMENT LEADERS
All CPOs are involved in creating operating models to support business performance, yet workable guidelines in this area have been in short supply. Hughes explores the challenges facing complex, multi-site, multi-country businesses and presents case studies of GlaxoSmithKline and WPP as examples of two contrasting models.
There is a marked trend towards centre-led operations in procurement, but often these fail because of turf battles and disputes about authority. A more sophisticated approach than “centre-led networking” is therefore now required.
Hughes outlines 10 possible operating models, ranging from totally decentralised procurement at one end of the scale to a totally centralised, top-down model at the other. He suggests five tests to determine whether a model is fit-for-purpose in the context of an organisational culture.
He goes on to outline eight features of successful operating model design:produce
a “parenting: proposition; be crystal clear on roles and purpose; secure
authority to act; incentivise the business to improve procurement; create a
business-aligned “value map”; create strong internal stakeholder
pull; focus on leadership and pivotal roles; and recognise the criticality
of people development.
