What is the definition of change management and what are the challenges for procurement departments?

Change management challenges
May 11th, 2023
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In an increasingly volatile and uncertain environment, change is essential for all types of businesses. Their profits and even their survival depend on it. The procurement function is no exception to this process. It continues the process of transformation that began some twenty years ago, moving from a purely transactional role to a highly strategic position. In order to implement a successful change, it is important that each project is developed and managed with the help of a proper change management system.

The transformation of the procurement function

Nowadays, companies must continuously adapt to changing markets, regulations, technologies, and customer expectations, etc. This translates into all kinds of transformational changes:

  • Strategic;
  • Organisational;
  • Methodological;
  • Technological;
  • Cultural.

Because the procurement function is at the heart of the company's ecosystem, at the crossroads between suppliers and internal customers, it is directly impacted by these new changes. As such, 39% of procurement managers see change management and process integration as a key issue, according to a recent survey by GEP.

There is no shortage of examples of changes in businesses: implementation of a new organisation, a digital solution, a sustainable procurement policy, an optimisation project, a Lean Management approach (also called Lean Purchasing), etc.

To carry out these different projects, procurement departments and leadership must implement the real definition of change management, while demonstrating agility.

Definition of change management in 4 steps

The definition of change management is a precise methodology which usually consists of four main phases.

Initiating the change

This is an initial reflection stage in which the change manager (also known as the transition manager) and their team assess the situation. They identify the implications of the upcoming change and determine the strategy to be followed throughout the company. This includes analysing the existing situation, defining the objectives, describing the expected results and impact, identifying the key internal and external players, etc.

Communication of the project

This second phase of change management aims to prepare the various people involved through a communication plan. The idea is to clearly state and explain to them the framework of the project, what will change in their work, and what are the expected benefits so that as many employees as possible are involved.

For managers, it is an opportunity to answer any questions and to clear up any confusion in the business. The messages, tone, and channels used (physical meeting, intranet, email, etc.) must be chosen carefully.

Training teams

This third phase consists of transferring the skills and knowledge resources to the teams involved in an effective way so that they can fully adopt the new working framework (new processes, new tools, organisational changes, etc.). It is important to consider the needs of the employees beforehand when planning the training.

Supporting employees

This fourth and final phase aims to stabilise the changes made in the company and to help the employees to learn and adopt the new framework. This includes managing fears and resistance to change.

It is important to involve employees identified as "neutral" as well as opponents through dedicated change management.

3 typical mistakes to avoid

Change management helps to define best practices and highlights some of the pitfalls to avoid.

Develop an infallible plan

The change manager may be tempted to plan everything down to the last detail. However, the project or the change management can always be affected by unforeseen events.

Therefore, it is wise to have a system in place in order to be able to quickly respond in case of need. These can be moments of exchange with a clearly defined decision-making chain.

Concentrate efforts on a given time

It is important to balance communication initiatives throughout the change process. Although it is a key moment, you should not focus everything on the launch of the project. It is important to ensure regular communication to support the teams and sustain their interest over time.

Focus only on resistance to change

It is important to note that in every change project, employees fall into three categories:

  • Supporters (20%);
  • Neutral (60%);
  • Opponents (20%).

Convincing opponents is important, of course, but it is often more useful to highlight the supporters in order to win over the "neutral" group. This is known as ally strategy.

The procurement function is undergoing major changes, and this is only the beginning of a long evolution towards a more strategic and value-creating role within companies. Change management is an essential process to ensure the success of this transformation.