Last week in our webinar “The future of Category Management: business strategy alignment as a driver for competitive differentiation” we shared the Strategy Alignment Matrix (SAM) publicly for the first time. SAM is a practical framework that can help strategic procurement professionals deliver the utmost value to the business by providing a structured approach to developing business-centric procurement strategies.
In recent years, aligning business requirements and strategies has become increasingly crucial for Procurement to build rapport with stakeholders and ensure go to market strategies are not developed in isolation. Procurement professionals are expected to understand and consider the traditional RAQSCI criteria (Regulatory, Assurance of Supply, Quality, Service, Cost, Innovation) for business requirements, but also need to support areas like Growth (G), Environment/Sustainability (E), and Diversity (D). This ultimately transformed RAQSCI into GRAQSCIED.
We live in a time of increased complexity that presents an exciting opportunity for procurement professionals to elevate their organizations and deliver enhanced value. With the associated cognitive load being substantial, the responsibility and performance expectations in procurement have never been greater. It is therefore vital to provide Procurement with the tools and frameworks to make this complexity manageable. Cirtuo recently won the ‘Highly Commended’ Procurement Technology Provider 2023 award by Procurement Leaders for its proven track record in helping strategic procurement teams drive business value.
The Strategy Alignment Matrix (SAM) provides straightforward navigation for aligning business requirements across procurement, from category to supplier, and negotiation strategies (in that sequence). It’s a robust framework that fosters engagement with top management and helps set the tone and direction for the entire procurement chain.
“It’s very important to know what the predominant agenda of your company is. You need to understand if the overall agenda is about cost, growth, innovation, sustainability, and what the mix of all these elements is,” said Drasko Jelavic, CEO and Founder of Cirtuo. “Only then can you develop a diversified procurement strategy that addresses these topics on global, regional, or local business level.”
The historic focus on cost reductions and savings has positioned many procurement teams as tactical and even transactional in nature. Treating cost reductions as a strategic goal while ignoring different expectations within categories and in supplier management has resulted in a systemic lack of trust between top management and procurement. This mindset continues to cast a long shadow that undermines the attempt to elevate the role of Procurement. And it keeps many category managers stuck in firefighting mode.
SAM provides a novel approach for Procurement that places business requirements at the organization’s core and enables top-down and bottom-up alignment. Ultimately, it helps turn Procurement into a business or customer-centric function. It even helps with developing operating models and digitalization roadmaps that are derived from business requirements and needs, not from theoretic exercises or the latest trends.
We will dive deeper into the individual elements of SAM over the coming months to demonstrate how it assists procurement professionals with strategically developing strategies that drive value for their business. If you want to discuss how SAM can help you implement a more holistic approach to Procurement based on aligning with business requirements, please email info@cirtuo.com.
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