A Comprehensive Guide to Procurement Transformation

Procurement transformation is the process of optimizing your entire procurement cycle to improve efficiency, increase strategic decision-making, and deliver greater value to the business. To do this, organizations use a combination of digital technologies, processes, and best practices to transform procurement from transactional function into a strategic advantage.

Companies that are still doing procurement the old-fashioned way—sourcing suppliers using emails and spreadsheets, manually inputting information, and communicating with vendors in siloed inboxes—are quickly falling behind.

That’s because these outdated ways of working are inefficient, waste time and money, and leave your business open to risk.

To build business resilience and unlock the benefits of strategic sourcing, forward-thinking companies need a streamlined, efficient, and powerful procurement process, fuelled by a best-in-class eSourcing tool that supports your team (like Keelvar—that’s us!).

Digital procurement transformation replaces repetitive, time-consuming procurement tasks with automated workflows, AI-powered scenario analysis, and centralized communication. This means your team spends less time on low-value, high-frequency tasks and can focus on sourcing in line with big picture business goals.

Just ask Samsung: by making the switch from spreadsheets to an eSourcing solution, they saved 85% of their time—and were able to generate an extra $5m in savings.

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The old way (before procurement transformation)

• Slow, manual processes lead to inconsistency and human error
• Siloed communication with vendors causes misalignment and increases risk
• Time-consuming and repetitive procurement tasks leave no time for strategic sourcing
• Inability to process large amounts of data manually leads to poor decision-making and a short-term focus on cost reduction instead of long-term value
• A disconnected combination of emails and spreadsheets mean data is incomplete and unreliable
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The new way (after procurement transformation)

• Automated and customizable workflows let you scale your best practices
• A single centralized platform for all vendor bids and communication increases transparency and improves supplier relationships
• 100% of the tender process is automated for tail and tactical spend, freeing up time for high-impact decisions
• AI-powered scenario analysis gives teams all the information they need to make business-critical decisions, even for the most complex sourcing events 
• An all-in-one eSourcing solution captures all data so you can continue to analyze, optimize, and improve your procurement processes

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See how Keelvar can transform your procurement with a free demo→

As you start out on your digital procurement transformation journey, you’ll need to make a plan to get you from point A to point B. To do that, you need both a procurement transformation strategy and a procurement transformation roadmap.

So what’s the difference? In a nutshell:

• A procurement transformation strategy outlines the big picture objectives of your procurement transformation
• A procurement transformation roadmap is the tactical execution of that strategy, turning those objectives into tangible tasks and deadlines 

In other words, the two work hand-in-hand to help you achieve the results you want on both a macro and micro level.

5 key elements of a procurement transformation roadmap  

When you’re creating your procurement transformation roadmap, make sure to include the following elements:

Clear organizational objectives. Set defined goals with metrics and KPIs that connect to core business priorities. These shared goals create alignment, ensuring that everyone knows what they’re working toward and what success looks like.

Resource allocation and budgeting. Define the resources you’ll need—both financial and human—as well as what you have available, so you can divvy them up appropriately. Factor in things like the cost of new software, staff training, and the bandwidth of your procurement team (who may need to manage the transformation alongside their existing day-to-day procurement tasks).

Process redesign and optimization. Map out the new process and how it improves on existing ways of working. For example, you could incorporate customer segmentation, category grouping, or enhanced spend transparency to create more powerful, granular, and reliable workflows and reporting.

Timeline for the transformation. Outline specific dates, working backward from key milestones or hard deadlines. Breaking big goals (like ‘Implement new technology’) down into small tasks (like ‘Evaluate eSourcing software’, ‘Migrate data’, ‘Onboard procurement team’, and ‘Run company-wide staff training’) helps to keep your project on track and on time.

Governance and oversight. Ensure that any new tools and processes align with your organization’s governance and oversight requirements. This includes vetting software to make sure it meets industry-leading security standards.

The stages of procurement transformation can vary depending on a number of factors, such as your organization’s specific goals, challenges, and industry context, but a typical roadmap usually includes the following five stages. If you’re wondering how to implement procurement transformation, start here.

1. Assessment and analysis 

Evaluate your current procurement process to find opportunities for improvement. For example, is your team spending hours on tasks that could easily be automated? Is it difficult for stakeholders to understand the status of bids? Or are you wasting money by prioritizing short-term cost over long-term spend? (Psst: these are all things that can easily be optimized with an eSourcing tool.)

To get a full understanding of the gaps in your current process, talk to multiple stakeholders, such as your procurement team, requesters, and suppliers and vendors. This uncovers pain points from different angles so you can upgrade the process for everyone involved. 

2. Strategy development 

Use the insights from your assessment and analysis stage to guide your strategy development. Document the goals of your digital procurement transformation, and set key roles and responsibilities. As mentioned above, this strategy will form the basis of your procurement transformation roadmap.

3. Technology evaluation and implementation

Research different eSourcing tools to find the right one for your team. To really boost your procurement transformation, look for an all-in-one sourcing solution that offers:

• AI-powered sourcing optimization that simplifies decision-making in even the most complex, high-stakes sourcing events
• Sourcing automation to remove up to 100% of manual work for low-value, high-volume tasks
• Customizable automated workflows that empower you to scale your best practices across the organization
• An intuitive easy-to-use platform that makes it easy for your team and requesters to get up and running, fast
• Integrations with the other tools in your tech stack to enhance efficiency‍
• Industry-leading customer success and professional services to help you unlock even more value from your investment

With Keelvar, you can build and launch automated sourcing workflows in minutes—and effortlessly scale your best practices across the entire organization

4. Change management and stakeholder engagement

The right tools and technology are a huge part of any digital procurement transformation—but don’t underestimate the importance of change management and stakeholder engagement, too.

Having a sponsor at CPO or VP level is crucial for driving adoption throughout the business. They can steer the implementation and communicate the benefits at an organizational level, ensuring that everyone understands how and why the procurement process is changing.

At this stage, you can also roll out training and onboarding to key stakeholders, turning them into internal champions for your new eSourcing solution.

5. Performance monitoring and continuous improvement

As market conditions and company goals evolve, so should your procurement process. The good news is that by centralizing all your sourcing data in one platform, it’s easier than ever to monitor your performance and find new opportunities. Use the wealth of information in your eSourcing tool to continuously analyze, improve, and iterate, so you can keep driving procurement transformation that grows with your business.

Digital procurement transformation doesn’t just elevate your sourcing—it has a positive impact on your entire business. Here are four impressive benefits of procurement transformation you can look forward to.

1. Cost savings and efficiency improvements

Procurement transformation leads to both immediate and indirect cost savings.

Using an eSourcing solution to identify, evaluate, and select the best possible suppliers lets you find the right vendors to deliver long-term value instead of short-term costs. This unlocks enormous cost savings: one tech giant saved $60m in cost avoidance over 12 months.

Not only does sourcing transformation lead to better outcomes for high-stakes sourcing events, but the efficiency improvements add up too. With autonomous sourcing, your team can win back hours every week, freeing up valuable resources for even more impactful work. 

2. Increased agility

More data, enhanced transparency, and centralized processes all enable you to become more agile. After procurement transformation, your team is better equipped to respond to market changes, identify risks and opportunities, and proactively adapt as needed. This improves business resilience and gives you a competitive advantage over companies who are still stuck in reactive procurement cycles.

3. Improved risk management and compliance

Switching from manual processes to an eSourcing solution lets you build compliance into your workflows by default. Customize your intake forms to ensure consistency and improve the quality of your data. Create automated workflows that capture all the information you need and map to your compliance needs. Then, analyze your data and run complex scenario analysis to identify (and mitigate) risks at the sourcing stage—before they cost you later on.

4. Enhanced visibility and supplier relationships 

Instead of siloed emails locked away in individual inboxes, procurement transformation brings everything together in a shared platform. By centralizing all sourcing communication, your team can easily and efficiently manage supplier relationships from one place. Quickly see the status of bids and follow up with vendors to build stronger relationships, and empower internal stakeholders to self-serve for quick updates on their requests.