Procurement Target Operating Model

👉 Procurement Target Operating Model – Key to success and value delivery

We at targetP evolving procurement have been fortunate to develop plenty of Procurement organizations and Target Operating Models in many industries. But what is it about?

A Procurement Target Operating Model (TOM) is a blueprint for how an organization intends to operate to achieve its strategic goals. It outlines the desired state of an organization’s processes, systems, people, and technology, bridging strategy and execution. It makes Procurement effective and efficient!

👉 Key Building Blocks:

📌Processes: Defines how tasks and activities are performed to deliver value, including workflows, procedures, and efficiency measures

📌Organization: Describes the structure, roles, and responsibilities within the company, ensuring alignment with strategic objectives.

📌Technology: Encompasses the IT infrastructure, software, and tools needed to support operations and enhance performance.

📌People & Culture: Focuses on skills, competencies, and behaviors required, along with the organizational culture that supports the model.

📌Data & Information: Ensures the availability, accuracy, and management of data needed for decision-making and operations.

📌Governance & Risk: Establishes control mechanisms, compliance standards, and risk management practices to ensure sustainability and resilience.

Different Target Operating Models (TOMs) in Procurement are designed based on an organization’s goals, industry, and complexity. These models help streamline Procurement processes, align them with business strategies, and optimize efficiency and cost-effectiveness.

👉 Some common Procurement TOMs:

➡️Centralized Procurement Model

➡️Decentralized Procurement Model

➡️Center-Led Procurement Model

➡️Hybrid Procurement Model

➡️Outsourced Procurement Model

➡️Category Management Model

➡️Digital or Automated Procurement Model

Each model has its strengths and weaknesses, and the choice of a TOM for Procurement depends on factors such as the organization’s size, industry, strategic goals, and the maturity of its procurement function. We at targetP develop, and establish the most effective TOM for you!