The three characteristics of a mature indirect procurement organisation

mature indirect procurement organisation
March 5th, 2019
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The maturity of indirect procurement organisations varies greatly from company to company, regardless of their type of business. To identify the position of your organisation, an essay by Décision Achats recommends following three key indicators:

1. The indirect procurement team

The very first element is, of course, the existence of an indirect procurement department, separate from the business departments. Not only does this structure give the department some independence to play its influential role, but it also allows for optimal management. The indirect procurement team benefits from a global vision and can therefore put a strategy in place across all its categories.

The maturity of an indirect procurement organisation also depends on the seniority of this team. The more this structure is tried and tested, the better it will work. On a practical level, this translates into good collaboration between the indirect buyers and the users, as well as affording the possibility for this team to focus more on strategy, as the partnerships are already in place.

2. Existing tools (particularly P2P)

The second element is the existence of digital tools and their utilisation rate. The flagship tool is still the Procure-to-Pay platform which in particular allows companies to:

  • Strengthen the procurement policy, with automatic notifications to buyers for example, when the procurement process is not followed by users
  • Carry out production reports to analyse expenditure according to various criteria, identify expenditure items in the procurement portfolio etc.

3. Procurement policy

The third element is the implementation of an indirect procurement policy,  this defining general approaches and intentions (for example: from what amount of purchases must buyers be involved in, the minimum number of suppliers that must be included in a call for tenders etc.).

In addition, any implementation of rules involves ensuring that these are properly applied. The level of control differs depending on the company: these range from ad hoc control to systematic and automated control (notably through the P2P tools). In some companies, it is even the compliance department that takes responsibility for this instead of buyers, this will limit the negative impacts that this may have on their relationships with other departments.

Finally, a new trend seems to be emerging: the allocation of a marketing budget for indirect purchasing departments so that they can communicate and promote their policies and strategies in the best way possible and, ultimately, encourage user engagement.

Keeping this three-pronged approach in mind—organisation, tools and policy—it seems appropriate to ask: what is the maturity level of my company, and other companies, in terms of indirect procurement? You will find some answers in the latest survey on indirect procurement.

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