The 9 Habits of Highly Effective Procurement Organisations

There's a well-kept secret fuelling the profitability and growth of the world's most successful companies, and it exists within your company, too. It's the procurement team. However, the procurement teams at companies like Colgate-Palmolive, Intel and Nestle do not resemble a typical procurement department. So what sets them apart from their peers? They deliver hard-hitting financial performance that improves operating margins, returns, and earning-per-share every quarter.

From aligning procurement's deliverables with top business goals to understanding exactly what needs to change in procurement to drive financial results, there are several habits that organisations can establish to encourage effective procurement practices that result in value generation for the company as a whole.

For instance, by delivering quick wins to change perception and build trust, procurement departments can start cultivating internal advocates - and more funding. Thay can do this through clearly demonstrating, from the start, previews of what their successful undertakings will bring to the business. It is also vital that procurement professionals understand and integrate with the goals of other departments. From R&D to marketing, procurement can't deliver meaningful results if they don't understand each department's challenges, priorities and goals.

Everything should be mapped back to the broader business plan, and aligned with the organisation's most-pressing business goals. An important role of procurement is to weigh and make tradeoffs to generate more value.

Despite the value that the procurement department can bring to an organisation, the majority of businesses are failing to establish and encourage habits that can drive these benefits. WHile the outcome of alignment and transformation projects are different for every organisation, the end result creates a clear path for procurement to drive financial results, earn more internal budget and resources, and demonstrate to key stakeholders the immense value and critically of their program.

You can learn more about the nine key habits and how that encourage an efficient and effective procurement department that helps generate wider organisational success by following this link:


Author: Mickey North Rizza, BravoSolution

Date: 18th March 2015

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