Six Ways to Improve Your Category Strategy Development
By Hugo Britt | September 13, 2022
6 ways to improve your category strategy
Below, we offer some tips on developing your category strategy to make it a live document that is aligned to enterprise goals, implementable, and data-driven.
1. Make it live
A category strategy shouldn’t be something you work on once and regard as “done”. Unfortunately, many procurement professionals make the mistake of writing their strategy before shutting it away in a drawer (or the digital equivalent) and rarely thinking of it again.
Use your category strategy consistently when communicating with stakeholders and ensure it is a “live” document that helps guide your decision-making. Give your team and business stakeholders the context behind the strategy to help them understand why decisions are made. If you can, condense the strategy to a single page to make it easy to communicate.
2. Make it aligned
Another reason to ensure your category strategy development remains live and ongoing is that business priorities are in a continual state of change. Perhaps there’s a new CEO or CPO, or maybe economic conditions or the competitive landscape has changed. Whatever the reason, category managers need to keep their fingers on the pulse of enterprise strategy, think about how any changes relate to their category management, and take action to stay relevant.
Becoming unaligned with business objectives means you will risk focusing your efforts on the wrong areas while managing your category. For example, procurement may be focused on cost reduction while the wider organization is more interested in reducing risk and increasing sustainability.
Remember that the enterprise strategy is only one of several important strategies in the organization. Category managers should also be familiar with developments in the finance strategy, people strategy, IT strategy, risk strategy, and more.
3. Make it implementable
How achievable are the goals identified in your category strategy? While it’s a good thing to set aspirational goals and targets, they will be unhelpful unless you are clear about how the organization will get there.
- Ensure the strategic goals are realistic and establish a clear picture of what you are trying to attain.
- Establish time horizons for each goal.
- Make a list of the variables that could hinder your ability to achieve these goals and make a contingency plan for each.
- Be clear about the systems/tools required to make the strategy a reality – what does the business currently have, and what investments will be required?
- Define roles and responsibilities then delegate as required.
- Monitor performance and adjust course when necessary.
- Define benefits and communicate successes across the business.
4. Make it data-driven
Eliminate guesswork by using clean, reliable, and relevant data to monitor category performance and progress towards your strategic goals. Start by determining the KPIs that need to be measured, then ensure you have the systems in place to gather and analyze data streams from various sources.
Use spend analytics to identify cost savings opportunities, prioritize suppliers, flag risks, and identify variables that could hinder performance such as maverick spend.
5. Make it evolve
- Has the market fundamentally changed?
- Has demand increased/decreased?
- Have any disruptions emerged?
- Are new technologies changing the landscape?
- Have overall business goals or priorities changed?
- Has the competitive landscape shifted?
6. Make it a priority
Solid category management should be a priority for every organization. Without it, you’re most likely leaving savings on the table. Most teams, however, underestimate the time and resources required for thoughtful category management.
If you have a small procurement team or believe additional value could be found in a category, consider partnering with a group purchasing organization. Working with the team at Una could be the boost your category strategy needs, especially if you’re mostly focused on direct spend or other strategic initiatives.
GPOs leverage their awesome buying power to unlock volume discounts across popular indirect spend categories including office supplies and facilities maintenance. In turn, this helps organizations save more money, time, and effort in categories that would otherwise be unmanaged.
Capitalize on the untapped value that lives within your indirect spend categories today and start saving an average of 18-22%. Contact Una to learn more.
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