The Cirtuo 15 guiding principles and rules of strategic procurement
What is Procurement Reframed?
Procurement Reframed™ are guidelines developed by Cirtuo through decades of experience in the digital transformation of procurement. The Cirtuo 15 guiding principles and rules of strategic procurement were identified through conducting +100,000 hours of research and development workshops. The principles were applied in developing Cirtuo Guided Strategy Creation™ procurement software. Cirtuo’s solutions are relied on today by Fortune 500 companies and SMEs to transform their procurement capabilities. The guides have helped Cirtuo’s clients to accelerate the development, validation, and execution of category and supplier strategies. The Procurement Reframed philosophy has roots in our history as expert management consultants in the procurement industry. As such, the knowledge, passion, and expertise were applied in developing Cirtuo category management software – delivering a solution that was a pioneer in the automation of category strategy creation.
What are the benefits of Cirtuo Guided Strategy Creation™?
Over the past 15 years, the timing was not suitable for significant procurement development. From 2010 to 2020, the world experienced its most extended period of economic growth. Cost reductions and supporting growth by all means necessary was a key focus for organizations with a procurement function during this period. Procurement was reduced to sourcing activities and RFx / negotiations to achieve cost reduction targets. The strategic element of procurement was considered “nice to have” but not essential, and its importance into the broader organization was not fully realized. Procurement strengthened the image of being purely tactical. COVID-19 caused a massive shift in supply chain balance, and now geopolitical conflicts require procurement to act as a firefighter for organizations in survival mode. As a result, the need to ensure business continuity is considered a top priority in times of immense disruptions, and cost reductions have become less critical.
The procurement evolution – that seat at the table – is now feasible and realized. Today, the scarcity of materials required to grow economies and maintain business viability – has highlighted procurement’s importance within the organizational framework. There is pressure in all areas of procurement for the function to move up the value chain curve. Procurement professionals tasked with searching for scarce goods and services now require a robust dialogue with stakeholders and a correction in redefining an organization’s final offering to avoid supply chain problems. A procurement framework that excludes considering the supply side can become expensive, so stakeholders will become more open to being approached by procurement to adopt new solutions. If we do not understand how to change by ourselves, then market dynamics will change procurement for the better, or it will lose its importance within organizations. It is a prime moment for many CPOs and PLTs to step up and retain a permanent seat at the table.
Spend and market intelligence
Analysis and strategy
Results and reporting
Request to pay automation
Contract management automation
Transformation | Drive value
Focus on strategic tasks: automate the rest
Cirtuo enables the strategic transformation of procurement
Procurement transformation is both – digital and strategic. We currently observe digitalization focused on operational-tactical activities – SRM, contract management, procure-to-pay, procure-to-source, etc. But these solutions are just creating infrastructure to become more strategic. Then the value is created upfront in the value chain process and is simplified by starting procurement where suppliers are already pre-selected or pre-determined by the specification, you have already lost that battle. There is nothing much to win. The Procurement Reframed concept defines 15 simple, proven rules for ensuring your organization becomes genuinely strategic. So your transformation needs to be strategic as well.
Strategic and tactical activities in focus
Strategy and Alignment
Rule of Alignment
Rule of Equality
Rule of Insight
Rule of Agility
Rule of Aspiration
Responsibility and Relationships
Rule of Responsibility
Rule of Relationships
Rule of Knowledge
Rule of Sustainability
Rule of Ethics
Operating model and Organization
Rule of Design
Rule of Automation
Rule of Relevance
Rule of Integration
Rule of Change
What are the practical implications of the Procurement Reframed concept?
Many organizations have told us these rules are known to them and that they are nothing new. However, a significant gap becomes visible when we start a dialogue about how they understand and apply the rules. The conversation typically begins with vague definitions of strategic, tactical, and operational (transactional) Procurement. The dialogue continues with a lack of strategic skills, lack of focus, and at times, leadership. Often consultants are asked to transform Procurement and deliver short-term results.
A survey tool will soon become available to help determine the development requirements to transform your procurement function. Cirtuo will also make it possible for you to conduct a self-assessment to begin planning an approach to developing an organizational procurement strategy. The Procurement Reframed concept is designed to assist with the explanation of how Cirtuo Guided Strategy Creation™ technology enables strategic Procurement. Cirtuo will integrate all the rules of category, supplier, risk management, and sustainability requirements to help procurement organizations become truly strategic.
Comprehensive category approach of analyzing business requirements and challenges to create value, reduce/avoid / costs and mitigate critical category risks.
The individual supplier approach strengthens the relationship, ensures product availability, meets requirements (price, sustainability, diversity, etc.), and supports innovation.