Aligning business requirements with Cirtuo’s enhanced RAQSCI model
The lack of trust from senior stakeholders is the main reason why procurement hasn’t gained a seat at the proverbial table. It stems from overemphasizing cost-savings instead of taking in the bigger picture and context of business requirements and objectives. Learning how to listen, identify, de-conflict, prioritize, balance, validate and address organizational requirements using the RAQCSI model is the key to strategic business alignment.
Creating holistic category strategies that enable effective decision-making and deliver business impact requires following a structured process. In our blog ‘Best practice approach to implement a Category Strategy Process that converts into actionable initiatives and measures’ we have outlined the 4 steps for developing actionable category strategies. Conducting an ‘Internal analysis’ is the first step of the process and focused on assessing the environment the organization operates in, understanding strategic business objectives, and capturing organizational needs and wants toward the supply market.
Category strategies should balance business priorities and Procurement objectives like top-down savings targets. Many of these objectives are conflicting. The lowest cost for the highest product quality from the most sustainable source can feel like mission impossible for procurement professionals. RAQSCI is a proven methodology for capturing business requirements which enables category managers to develop bespoke strategies that drive real business value.
RAQSCI: a framework for capturing business requirements
RAQSCI is a framework for capturing business requirements. The acronym covers a broad set of dimensions that are defining the expectations of the business towards the external market and suppliers. Each letter represents one dimension as listed below:
Regulatory: All applicable laws, standards, and regulations that need to be complied with to avoid potential legal ramifications and uphold organizational reputation.
Assurance of supply: The business needs in regard to the continuous and consistent access to vital products, resources, and the (financial) stability of suppliers.
Quality: The specifications and standards for products or services that pass the organizational requirements.
Service: The expected level of service from suppliers, ranging from communication effectiveness to overall reliability.Cost (or commercial): The financial objectives in regard to costs, commercial terms, and savings that ensure value for money.
Commercial considerations include aspects like cost breakdowns, contract terms, payment terms, etc.
Innovation: The organization’s expectation for innovative solutions in products or processes and the use and impact of developing technologies.
The RAQSCI framework should be executed in a step-by-step manner, similar to walking up a staircase. This ‘staircase’ principle ensures that a hierarchical analysis of business requirements takes place as the order of the RAQSCI elements is critical to the success of the analysis. Each step in the staircase represents a potential business requirement which must be fully identified and scoped before commencing the next step. The staircase approach is a guide for professionals to engage with each business requirement in a structured way, ensuring all dimensions are considered.
From RAQSCI to GRAQSCIED: the evolution of business requirements in procurement
Over the past years, the expectations toward procurement have grown in response to regulatory and societal developments, primarily in the space of ESG (Environmental, Social, Government). Recognizing the evolving complexity of business environments, Cirtuo believes additional dimensions need to be added to the traditional RAQSCI model to fully capture future business requirements.
We believe that business areas such as Growth, Environmental Sustainability, and Diversity, should be added as a result of their direct contribution to the top and bottom line. These additional dimensions are already shaping the expectations for suppliers today and will further influence who organizations conduct business with, thereby transforming the traditional model from RAQSCI to GRAQSCIED:
- Growth: The ability to support business expansion and the scalability of the organization. This encompasses revenue growth and market expansion, as well as organizational growth such as through mergers or acquisitions.
- Environmental Sustainability: The ability to support the organization’s commitment to ecological responsibility, reducing its environmental impact, and promoting long-term sustainability.
- Diversity: The ability to support the organizational DEI (Diversity, Equity, Inclusion) objectives to reflect the broader commitment to inclusion in business processes by increasing the collaboration with suppliers from varied backgrounds.
Gaining a deeper level of understanding of what the business really needs
By understanding the various GRAQSCIED dimensions and paying attention to what the predominant agenda of the organization is, both in terms of needs and wants, procurement professionals can develop tailored category strategies that both prioritize and address cascading business requirements. It is not enough to merely collect the relevant information on business requirements. Category managers need to go one step further and critically engage with that which they’ve collected, to determine wants from needs and their ranking in terms of priority.
In principle both RAQSCI and GRAQSCIED sound simple, but they are hard to apply in practice. Often many of the elements aren’t given enough consideration, or some are ignored altogether, and only cost related requirements are addressed. Procurement professionals need to dig deeper into each of the business requirements, by engaging with multiple stakeholders, and learn to distinguish between what is a necessity versus a nice-to-have. Delivering on business needs whilst still being conscious of the wants is a delicate balance required of category managers.
A focus on simply reducing costs and identifying savings, positions procurement as a tactical function and keeps many category managers stuck in firefighting mode. Ignoring the holistic requirements of an organization perpetuates a lack of trust from top management, and leaves procurement without a seat at the table.
The Strategy Alignment Matrix (SAM): A practical framework for aligning business requirements
While the increase in business complexity presents exciting opportunities for procurement to deliver greater value, professionals require the right tools and support to manage this complexity. They need support in building meaningful dialogues with management and stakeholders in order to make heads or tails of business requirements and avoid things getting lost in translation. Cirtuo provides a practical framework for aligning business requirements across procurement, from category to supplier, and negotiation strategies.
The Strategy Alignment Matrix (SAM) offers a proven methodology built on the GRAQSCIED dimensions that facilitates engagement with senior management and helps set the direction for the entire procurement chain. SAM provides a structured approach to developing business-centric procurement strategies by placing business requirements at the core and enabling top-down and bottom-up alignment. It helps procurement teams drive greater value, and operate as a business and customer-centric function. SAM guarantees decision-making that stems directly from business requirements and needs, and ensures category strategies are not developed in isolation. With Cirtuo, category managers get structured support, enabling them to navigate business complexity with ease and develop strategies that cater to evolving business requirements.
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 email@example.com.
Join the conversation on Linkedin.