Procurement Transformation: How to Drive Real Change

This episode of Proc-N-Roll dives into procurement transformation, exploring what it truly means and how to approach it. The hosts, Natasha, Zach, and Conrad, with their combined 70 years of experience, emphasize that transformation is a holistic endeavor encompassing people, processes, technology, and stakeholder engagement. They debate the merits of “big bang” versus incremental approaches, highlighting the importance of a clear vision, gap analysis, and a well-defined roadmap. Whether you’re aiming for a complete overhaul or gradual improvement, this episode offers valuable insights and practical advice for navigating your procurement transformation journey.

Watch now or read the transcript below.

Transcript: Proc-N-Roll 02 | Procurement Transformation – What it really means, how to approach it, and common pitfalls to avoid.

Conrad | Hey, everyone, and welcome back to Proc-N-Roll, your guide to practical procurement! Today, we have Natasha, procurement pro extraordinaire with experience at IBM, McKesson, Salesforce, and Nike, and Zach, our go-to procurement expert from KPMG London.

Natasha | It’s great to be back. I just returned from a supply chain conference in Arizona, where AI was the hot topic. There was lots of buzz but insufficient clarity on how it will be used effectively. 

Conrad |  I hear you. I was just at ProcureCon in Orlando, and AI was the talk of the town there, too. It feels like we’re at the peak of inflated expectations when it comes to AI.

Zach | Things are quieter here in London, but I’m seeing a resurgence in companies using technology to transform their procurement functions.

Conrad | Speaking of transformation, we talked about the chicken and the pig last time we were together. That got me thinking about leadership and how we drive real change in procurement. Natasha, you’ve led transformations at some major companies. How should we think about this?

Natasha | First, let’s define transformation. It’s more than just business hygiene—having a solid sourcing pipeline, strong category strategies, and clear savings definitions. True transformation involves tackling shadow procurement, integrating acquisitions, and actively managing the bottom line. It’s about looking at the big picture and making changes that impact the business.

Conrad | So it’s not just one or two projects but a whole collection of initiatives?

Natasha |  Exactly. It’s not a single project but a complex set of activities across different categories.

Conrad | Zach, you must see this all the time at KPMG. What do companies typically need help with? 

Zach | Companies usually understand their pain points well but often struggle to address them effectively. They need help taking a step back and examining the procurement organization holistically to create a transformation journey that covers all the necessary elements.

Natasha | I often see companies over-indexing on technology, treating transformation as a technology improvement project rather than a holistic endeavor. Technology is an enabler, but it’s not the whole story. You need to fix your processes, develop your team’s skills, and build strong stakeholder relationships.

Zach | I agree. There’s too much focus on the tech stack and not enough on the fundamentals.

Conrad | So it’s about people, process, and technology – in that order?

Zach | Absolutely. You need to have the proper foundation before investing in technology.

Natasha |  And don’t forget about supplier relationships. Suppliers are a source of wisdom and can help elevate your transformation.

Conrad | This is all starting to sound overwhelming. Where do you even begin with a transformation?

Natasha | Step zero is understanding the company’s commitment to transformation. It must be a priority, and everyone must be on board. 

Zach | You need that mandate from the top.

Natasha | If the company isn’t ready, focus on operational improvements. Identify the most critical needs and address those first.

Conrad | I’ve always believed in taking a more incremental approach, focusing on continuous improvement and making small changes over time. It may not be as flashy as a significant bang transformation, but it can be just as effective.

Natasha | That’s one approach, but you’ll hit a point where you need to make bigger changes, like investing in new technology, to really move the needle.

Zach | It’s about finding the right balance between incremental improvements and larger-scale initiatives.

Conrad | So, we need a vision, a roadmap, and a plan for how to get there. What are some best practices for building that roadmap?

Zach | Start by examining the source-to-pay process end-to-end. Identify your pain points and prioritize them. Don’t underestimate the time it takes to make real change and ensure you have the right resources.

Natasha | Align your roadmap with the company’s priorities and consider where the company is falling behind. Conduct a gap analysis to identify areas that need to be addressed.

Conrad | This has been a fantastic discussion. We’ve covered a lot of ground today, from the importance of a clear vision to the need for a well-defined roadmap. The key takeaway is that transformation is a journey, not a destination. It requires commitment, planning, and a willingness to embrace change.

This transcript has been edited for clarity while maintaining all substantive content