The article below is written by Demon de la Pena on November 4, 2011
Capgemini Consulting has a vision of “Procurement transformation through Innovation.” We define innovation as the successful implementation of creative ideas within an organization. The Procurement Assessment tool is one of several tools to help foster procurement creativity and innovation by identifying potential process gaps within an organization. We understand that organizational leaders are tasked with growing top line revenue for their companies and realizing measurable cost efficiencies from operations. We recognize that cash flow is critical to support future growth initiatives and build value creation for our clients.
Capgemini utilizes a comprehensive Procurement Transformation Model to identify process gaps and help organizational leadership realize potential cost efficiencies within their operations. The Procurement Assessment leverages the elements of this transformation model to analyze the current methodologies of an organization’s procurement operations against best-in-class performance. Every other year Capgemini completes a global Chief Procurement Officer survey to identify best in class trends. These findings are incorporated into the Procurement Assessment questionnaire. The assessment analyzes core foundational, operational, and strategic elements that an organization must have in order to optimize cost efficiencies from its operations.
The foundational questions in the assessment analyze key organizational practices such as people capabilities and organizational design. This section looks at how technology is leveraged across the organization and what core processes are utilized to sustain critical procurement functions.
The operational questions analyze how the organization is utilizing purchase-to-pay activities and identifies where key gaps may be present. This section reviews the overall contract management and compliance processes. It also looks at spend management and how an organization leverages demand management. Finally, it evaluates a company’s supply base management processes.
The strategy questions are designed to test how a procurement organization is strategically aligned to the overall company strategy to acheive growth and revenue targets. Best-in-class companies align their procurement organizations with new product development to support new product launches and mitigate business interruption risks. The questions in this section also look at strategic sourcing and how effective an organization is at procurement governance. This governance helps an organization follow its procurement policies and realize its saving, quality and on-time delivery goals.
The Procurement Assessment Tool supports Capgemini’s vision of procurement transformation through innovation. An effective sourcing & procurement operation establishes the innovation engine to drive sustainable cost savings over time. Best practice strategic sourcing coupled with robust technology solutions can optimize total acquisition costs by as much as 10-40%. Although strategic sourcing may drive most of the hard-dollar savings, it is a full procurement transformation effort that sustains these savings year over year. . Capgemini’s Procurement Assessment aids in the identification of transformation gaps and is one of several tools to help foster creativity and innovation for our clients.