A Blueprint for Procurement Transformation

Nataša Cikač, Founder and CEO of Cronata and international procurement thought leader, wrote the book on procurement transformation… literally. (But, don’t worry if you haven’t read it yet, as it’s – for now – published in Croatian.)

Building on more than three decades of experience in procurement transformation and her extensive background in transformation leadership, 10 years ago Nataša launched Cronata, a successful Croatian company that provides procurement transformation support and coaching services to companies around the world.

Procurement transformation blueprint

In a recent episode of The Sourcing Hero podcast, Kelly Barner spoke with Nataša about how her background in procurement transformation has informed her philosophy about what it takes to successfully pitch, plan, and implement a transformation project.

Here are three important steps that Nataša says procurement should keep in mind when they’re planning for transformation.

Get management involved as soon as possible

Management outside of procurement plays a huge role in the procurement transformation process, says Nataša, and one of the first steps to any successful transformation initiative should be to establish clear communication, expectations, and a systematic process for involving management throughout the transformation journey.

“Management has to be aware that the transformation process includes all participants in the company, and even sometimes management has to change the way they do some things,” she said. “The main point I tell management at the start of a transformation process is that they cannot be out of the process. They have to be a part of it. They have to lead by example. Only then, people will understand, and it will be easier for them to accept the change.”

Making management an active contributing partner in the transformation process can also lead to some hard, but necessary, truths that are best addressed as soon as possible. They are often faced with their own role in creating broken or inefficient processes, as well as their responsibility to help support and socialize the transformation across the entire business, beyond just procurement.

For a procurement transformation to truly do its job and optimize business processes, workflows, and performance, procurement as a function can’t lead the way in isolation.

“We cannot change the procurement process and the rest will remain intact. This is not possible,” said Nataša. “They are not aware at the beginning, but as the transformation process is going on, they start to realize how important it is for all internal stakeholders to adapt and also transform.”

Define procurement’s scope, from beginning to end

When any part of the business is unclear about where, how, why, or when procurement should be involved and the value they bring at every stage, the transformation process will suffer needlessly.

While it might seem rudimentary at first to revisit the basics about where procurement’s role begins and ends, Nataša says laying this out clearly at the beginning of a transformation could save a lot of time and energy along the way.

“The most important thing – regardless of the size of the company – is to define where the procurement process starts and where it ends,” she said. “It is mandatory to define the responsibilities and obligations within procurement, but also for all our internal users – who will order, under what conditions, where is the financial authorization, who is responsible for the legal part, and so on.”

Set clear expectations, not only for procurement

Finally, said Nataša, establishing clear, agreed-upon goals and expectations about the transformation process and the outcomes everyone is working towards should always be a routine start to any transformation project.

“I always want to put expectations and the goal you want to achieve with each transformation process at the beginning. Of course, unplanned situations always arise, but from my practice, I can already forecast a lot of it, and it is very important for me that this is clearly communicated in advance with the management,” she said.

One of the most important reasons that procurement should be so bullish in laying down expectations from the start is that many business units, managers included, often don’t understand what a transformation process actually looks like from beginning to end, and, along with that, the kinds of delays, costs, or challenges that can (and usually do) create some bumps along the way.

It’s also common for a transformation process to uncover areas for improvement or less-than-optimal practices happening in other business units, outside of procurement. When this happens, says Nataša, (and it usually does), if expectations have been laid out clearly, those other functions will understand clearly how their own self-reflection and role in the transformation process will help lead the business – collectively – to success.

“We all know it’s difficult to change. … it’s not easy,” she said. “And when we add to that a lack of adequate communication, any improvement will be difficult.”

Listen to Nataša’s full episode of The Sourcing Hero here: