A growing number of variants, increasing cost and competitive pressures have been shaping the procurement landscape for years. Currently, organisations are also experiencing severe disruptions in global supply chains due to geopolitical and global economic shocks. As a result, organisations are to a much higher degree than ever before looking to improve their supply chain resilience, end-to-end supplier transparency and focus on ethical and environmentally conscious sourcing. Procurement transformation is about enabling you and your organisation to implement the necessary initiatives needed to accommodate for the many disruptions affecting the global supply chain environment. 

This has led to the procurement function no longer being viewed as a basic backward-looking purchasing department, but instead as an essential and major stakeholder for the business able to support their every demand by providing valuable services. 

The procurement function can and should be one of the driving forces in shifting towards a more digitised, ESG-supporting and efficient way of procuring products and services. The procurement department has some of the best opportunities to directly impact the opportunities to optimise value, costs, risks, return on investments (ROI), improved decision-making, providing greater business resilience and especially supporting the ESG agenda, which has become more relevant than ever before.

In the table, we have listed the most common challenges and opportunities for procurement functions.

Procurement model

How we assist you with procurement transformation

Within Procurement Transformation we focus on improving, optimising, empowering and transforming your organisation’s procurement functions. We offer support within a wide array of transformational services used to strengthen and increase the efficiency of your procurement team. This includes assessing your maturity level, identifying potential areas of improvement, strategising, managing vendors, executing tender processes or delivering digital solution implementation projects.

We can assist you through your procurement transformation journey by implementing key business processes, advising on best practice and provide recommendations for a procurement operating model that fulfils your business requirements and supports your sustainability and ESG objectives, e.g. through third party performance management or contract lifecycle management. The transformations are often supported through the implementation of the right technology solution.

We enable your business to achieve its goals, delivering tangible value through the utilisation of our solution enablers, accelerators and best practice methods and designs, saving you from reinventing customised solutions to common problems.

Below you can read more about the different areas we can help you with.

Our operating model for procurement transformation

A target operating model is a strategic document that determines how a specific function (fx. the procurement function) should operate in the future, and it usually consists of three elements: people, processes and technology. At KPMG, we understand that the world is a bit more complex than only assessing how three elements such as people, processes and technology should look like in the future. That is why we have developed our own target operating model, ensuring a higher level of granularity based upon hundreds of worldwide projects. Our target operating model is part of our larger Powered methodology and consists of six layers: functional processes, people, Service Delivery Model, technology, performance insights & data and governance. You can read more about the individual six layers here.

Our target operating model for procurement comes pre-designed both tech agnostic and specifically developed for procurement solutions such as Coupa, Ivalua, SAP Ariba, Oracle and Microsoft. Each target operating model contains hundreds of leading practices, design considerations, KPI’s, security controls and risk measures. This ensures a low-risk and seamless solution that already has taken regulatory standards and risk mitigations into account.

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The solid foundation for any transformational project contains an even more solid target operating model, ensuring that all your comprehensive thoughts and considerations of “the future” is structured and clearly understood. It is always a good idea to spend extra time on the design of the strategic foundation, as this will greatly affect the outcome of all the initiatives you build on top.

At KPMG, we would love to hear your initial thoughts and considerations, and we stand ready to assist you in all aspects. Don’t hesitate to reach out for a talk about how you can get the best out of your upcoming transformational project.