The Big 50: Practical Steps to Building the Procurement Model of the Future

Welcome to a massive milestone: Episode 50 of the Proc & Roll podcast!  To celebrate, hosts Conrad Smith, Natasha Gurevich, and Zachary Bachir shifted gears from high-level theory to deliver a highly practical, step-by-step guide to building your procurement operating model.

But before diving into the frameworks, the trio unpacked the very real ways AI is reshaping their day-to-day lives—and shared a powerful reminder about the human element of leadership. Here is a breakdown of the core insights from Episode 50.

1. AI Agents Are Here (And You Can Build One)

The theoretical future of AI is officially our current reality. Conrad introduced his new AI Chief of Staff, affectionately named "James". Instead of doing it himself, Conrad instructed James to update the company org chart and publish the new version directly into the employee handbook—which the AI successfully executed.

This inspired Natasha to tackle her own administrative nightmares. Rather than manually snapping photos of $15 expense receipts or migrating meetings between client calendars, she is building her own AI agent to automate the process.

The takeaway? Don't be intimidated by the tech. Zachary notes that putting together a functional demo agent can take as little as two to three hours. You can even use an AI (like ChatGPT or Claude) to explicitly write the instructions and design the agent for you.

2. A Masterclass in Servant Leadership

Amidst the talk of automation, Natasha shared a touching story that highlights the irreplaceable value of human connection. While navigating the Atlanta airport, she found herself in a 97-minute security line alongside roughly 4,000 other travelers. Managing that massive crowd was a single TSA agent—but instead of being grumpy or overwhelmed, he was energetic, friendly, and greeting passengers by name.

In a moment where he easily could have chosen to stay home or let frustration take over, he chose to show up with positivity and serve the people in front of him. It serves as a stark reminder for procurement leaders: as the world becomes more automated, the human experiences you create will become your most valuable asset.

3. How to Build the Procurement "Skeleton"

When it comes to building an operating model, many leaders make the mistake of immediately looking at their spend data or drawing boxes on an org chart. According to the Proc & Roll team, that is completely backwards.

Here is how you actually build a resilient framework:

• Start with the Enterprise Skeleton: Before you build procurement, you must understand the structure and goals of the broader business. Are you highly centralized, or do you have global distribution centers and manufacturing hubs? Your operating model is the skeleton; the org chart is simply how you fill it in with people and roles later.

• Align with Business Outcomes: Your operating model must directly connect to enterprise goals. If your company is heavily focused on mergers and acquisitions, your procurement model needs a dedicated M&A integration team.

• Map Verticals vs. Horizontals: Natasha suggests a clean structural approach. Treat your spend categories (like IT, marketing, or supply chain) as vertical pillars. Then, treat your functional capabilities—like category management, strategic sourcing, and contract support—as horizontal layers that stretch consistently across the entire enterprise.

• Stop Chasing Nirvana: Do not blindly copy a "best practice" from a conference if your company doesn't have the headcount or resources to execute it. Design your model for success based strictly on the resources you actually have available today.

Finally, as Zachary points out, you do not always need to pay expensive consultants to build this for you. By stepping back, looking at the resources you have (including cross-functional partners in Legal and IT), and keeping your focus locked on enterprise success, you can design an operating model that truly works.

Transcript: Proc-N-Roll | The Big 50: Practical Steps to Building the Procurement Model of the Future

Conrad: Top of mind for me is my new chief of staff named James. I have released James into the wild now, and we have an open claw chief of staff at graphite that's helping me with my stuff. I basically said to James, I want you to put yourself on the org chart with a direct line to Conrad... and it did it. I now have this almost unlimited list of just nagging hassle in my life that I feel like needs to be automated.

Zachary: Anthropic released also the Claude Co-Work which I think works very similarly. You connect it to your WhatsApp, connects to your slack, and it will sort of operate your computer for you as well.

Natasha: Syncing the calendars is actually what I am working on. That will be my first agent. I can believe that my Co four is still asking me to take a picture of every receipt of like, $15... I hate this stuff. I will sit down one of the weekends and just design my own agent. Trust me, if I manage to build the agent that anyone can.

Zachary: I think the secret Natasha is going to be genuinely just use an AI to build the agent for you.

Conrad: Let's jump into the topic of the day today, which is a deeper dive, a more practical dive, maybe into the operating model. I've got to go back to the office now, and it's my job to build an operating model. Where do I start? Zach, where do you start?

Zachary: Assuming you don't have an operating model already... I would probably start by understanding the spend. Ultimately, that's what you're doing in procurement as you're managing spend. I think step one for me would be understanding kind of the business, how the business operates. What you want to do is you want to be able to look at the resources that you've got and then sort of map those against the spend.

Natasha: I would take spend out of step one. I think the first thing that we need to understand when we're building operational model is what's the structure of the company. You take that the overall structure of the company and you determining how procurement supports each different kind of column. Operating model, it's a skeleton on which you will later be putting the muscles and tendons and ligaments of the different procurement teams and expertise. To build this skeleton for operating model, you need to understand the skeleton of the enterprise.

Conrad: We say all the time we're here to enable business success. Maybe that's the overarching thing is a clear like we really have internalized what is the business trying to achieve?

Zachary: You want to look at the different core pillars in the business and ask how is procurement going to add value. And then from there you're designing your blueprint, which I think what you put is actually with the skeleton. And then you're doing the ligaments, which is the people, the processes, the technology.

Natasha: The outcome is always connected to enterprise goals. So operating model can change if the enterprise is moving into different direction. If you know that you are part of the organization that is heavy on acquisitions, for example, then your operating model should reflect that. I think very important in an operating model is also connecting to the enterprise structure.

Conrad: If you jump in and just start trying to transform procurement, even against some sort of de facto best practice, you go to a conference, you come back and say, everybody's doing it this way... That's probably a recipe for failure. You end up building this thing out without building it in the context and on the foundation of the business success that you're trying to achieve. Doing it in a vacuum, what a disaster. Ultimately, the success of the operating model is probably the alignment of the people, processes and technologies with the expectations and outcome.

Zachary: My firm will probably kill me for saying this, but for a lot of companies when they want to design a model, they ask consultants to come help them do it. But I think we've laid out very clearly how straightforward ultimately it is. You don't need to get that from consultants, you know, like call us or call one of us. We can also help you or get it from your network and ask AI anyways to figure it out.

Natasha: Let me ask you a question. The way I built multiple operating models in the past, my structures had always been I only had verticals in the areas of spend, and everything else was horizontal, like category management was horizontal. So across the entire enterprise, strategic sourcing was horizontal tactical support. The only vertical would be marketing, corporate professional services, supply chain. Does it make sense or not?

Zachary: Natasha, your model actually makes perfect sense. You got your verticals which are your spend categories and your horizontals, which are your processes which cross. Build the operating model that works for you with the resources available to you and in your specific context. My takeaway is yes, absolutely everyone can reduce FTEs. But the right approach is to think I'm not going to reduce my FTEs, I'm going to repurpose those FTEs that have not been freed up to scale my impact on the rest of the expenditure to deliver more strategic initiatives.

Natasha: I think also important distinction between operating model and org chart. What comes first operating model comes always comes first not the org chart. You build the operating model because as you scaled an org chart is how are you going to feel in.

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