The Four Stages of Procurement Maturity

This report details a Procurement Organization Maturity Model to help you understand where your organization stands today, how to measure value at that stage, and when to plan for moving to higher stages towards best-in-class--to spend smarter by tapping into the power of advanced negotiation and community “intelligence” to drive business innovation.

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The Four Stages of Procurement Maturity

In this guide, you will learn:

  • The 4 stages of procurement maturity, from tactical & operational to business innovation
  • What people, processes, and technology you need to advance your procurement maturity
  • How mature organizations use a 5- or 7-step sourcing process to maximize value
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Each purchase a business makes provides an opportunity to add value. As an organization grows and matures, it requires skill and agility to increase value while balancing an organization's people, processes, and technologies.

Using the Procurement Organization Maturity Model, you can evaluate your existing procurement process and obtain methods and processes to progress in maturity on your way to Best-in-Class procurement strategies and capabilities.

Success in developing the Procurement organization is achieved by refining three key elements: the people, the processes they use, and the technology that supports them. Moving to the higher stages of the Maturity Model lets the Procurement organization manage more spend and optimize the way that the company purchases goods and services, delivering results straight to the bottom line.
The Four Stages of Procurement Maturity

FAQ

What are the four stages of procurement maturity?

In the first stage, the procurement organization is focused on tactics and operations, especially with regards to ordering and invoice processes. In stage two, the procurement team looks to improve sourcing by improving basic sourcing practices, spend analytics, strategic sourcing, and contract management. Procurement organizations in the third stage are looking to improve category strategy by improving supplier management, category strategy development, and category and demand management. In the fourth state, the procurement organization can focus on business innovation to continue adding value.

What are the seven steps recommended to maximize value in the strategic sourcing process?

The first step is to assess the opportunity and collect data. You will then develop a baseline and define requirements. Third, you will develop your sourcing strategy, followed by executing a sourcing event. Then, fifth, you will negotiate terms and make a recommendation. Sixth, you award the contract and eighth, implement and monitor. Download the eBook for more detail.