The procurement maturity model: Where does your organisation stand?

14/12/2022

Summary

Learning where your organisation currently stands in terms of procurement maturity and clearly identifying any gaps, while laying out decisive procurement goals for the future, could be the difference between operational profits or losses in an uncertain business environment.

During these trying times in which businesses have to adapt swiftly and be highly flexible, it is important to understand how optimising procurement can benefit your organisation. It is, therefore, also important to prioritise understanding what a procurement maturity model can do for your business.

The entire exercise aimed at understanding the current procurement processes and making tailor-made improvements to fit the unique case of your organisation begins with determining procurement maturity and knowing where your business stands.

The ideal result that is expected from subjecting a procurement function of a business to a procurement maturity framework is demonstrating how procurement maturity assessments lead to strategic improvements while encouraging organisations to take the next step in realising procurement excellence.

Knowing where the current procurement processes of your organisation stand in terms of procurement maturity is essential to optimise your supply chain and procurement strategies.

Maintaining a procurement function that operates at peak efficiency ensures that your business can maximise its return on procurement spends while keeping purchasing and other related costs at a minimum—contributing directly towards profitability.

It is critical that your procurement processes and strategies evolve to better match the constantly changing procurement environment, to benefit from new opportunities in the procurement space and to mitigate new challenges arising from a turbulent procurement climate.

Hence, the requirement for a proven procurement maturity model is clear—to map out a reliable path that organisations can follow to maximise the effectiveness of their procurement processes and strategies, in the quest to achieve procurement excellence.

Understanding what a procurement maturity model can do for your business

The right framework for assessing procurement maturity will play a vital role in assessing and improving the overall procurement processes and performance within your organisation.

Generally, the model will consist of several levels that correspond to the level of maturity instilled within the procurement practices and strategies of each organisation. For example, a startup in its first year of operation could have a procurement maturity level of 1, while a well-established corporation with operations spanning a few decades may be at a procurement maturity level of 4.

Procurement maturity is not simply based on the duration that organisations have been in operation; rather, it uses a comprehensive set of tools as well as tried-and-tested methods. The exact levels and criteria used will vary based on the specific model being applied.

The overarching goal of applying a proven model to assess procurement maturity within your organisation is to pinpoint areas for process improvement, ultimately laying out a clear roadmap that your organisation can follow to integrate the suggested improvements.

This exercise will allow your business to save time and money invested in procurement, improve the overall efficiency of the procurement process, and mitigate risks arising from procurement-related problems.

Determining procurement maturity and knowing where your business stands

Conducting a strategic procurement maturity assessment of the current procurement process within your organisation is the first step in determining where you stand in terms of procurement maturity.

The assessment provides valuable insights and a detailed understanding of how effective the current procurement processes are and the results are extremely useful in amplifying the strengths of the current procurement processes and remedying any weaknesses—for maximum performance.

The assessment detailing procurement maturity can also help businesses fine-tune their procurement strategies to leverage opportunities arising from the ever-changing procurement landscape, such as the integration of innovations in digital procurement to boost supply chain efficiency, as well as to better prepare for any anticipated threats, such as supply chain vulnerabilities.

Demonstrating how procurement maturity assessments lead to strategic improvements

For a procurement strategy to be deemed accurate, the results achieved through decisions taken need to be proven and validated through clear facts and evidence. Strategies that are grounded on educated assumptions may also prove to be accurate over time, which will add greater validity to strategic decision-making within your organisation.

The perfect maturity assessment technique will be guided by relevant data collected through surveys and interviews which will be validated prior to being analysed and finally compiled in a detailed report with insights and targeted recommendations.

As your organisation grows and changes constantly, the requirements from the procurement process will change in turn and need to evolve to meet new goals. A maturity assessment will assist you in defining which stage of growth your organisation is at and in identifying the specific strengths and possible vulnerabilities that your procurement function may be subject to along this stage.

Via the insights gained in the procurement maturity assessment, your procurement strategy will be supported with reliable data in real time.

Follow the pathway through procurement maturity toward procurement transformation

An effective procurement maturity model is geared towards assisting organisations to reach their maximum procurement capacity and capabilities, which often necessitates a complete transformation of the existing procurement processes, allowing businesses greater flexibility and strategic depth during challenging circumstances.
Even though procurement maturity assessments can yield good results for businesses, success will depend on the accuracy and thoroughness of the framework used—a truly competent model for procurement maturity can generate results that help you lead highly successful procurement transformation and drive your business to reach new heights.

Why follow your project as part of a public funding request?

Your project often represents a significant investment for your business. To address this, you may be eligible, subject to conditions, for various government aids such as:

Regional aid, in the form of business subsidies or recoverable advances,
Exemption from the exemption for eligible personnel assigned to your research and innovation project.

The tax authorities impose certain requirements regarding the justification of the time spent by staff assigned to R&D (Research and Development) work. If you receive an R&D subsidy or loan, your employee claims are based on precise timesheets.

If we focus specifically on the tax administration’s controls in connection with BELSPO , it particularly emphasizes the following concepts:

Tracking R&D staff time,
The detailed description of the tasks carried out and the contributions made,
Project updates,
Management and coordination of the project(s),
The match between staff positions and qualifications and the activities carried out.

How to track your R&D staff’s time?

The reporting company must be vigilant in properly anticipating the monitoring of its R&D personnel’s time in advance, using appropriate data collection and storage processes. These are essential to ensure the consistency and eligibility of the project(s) declared for this public aid.

These timesheets, per person and per project , must record the hours or days spent by each person on tasks specifically dedicated to R&D. They represent the most secure way of tracking staff time, even if they are time-consuming and require regular monitoring.

Timesheets can be completed via:

Specific monitoring tools (internal or external),
An individual Excel file,
Time tracking on an electronic calendar (easily removable).

To support the justification of its personnel costs, the company must be clear about the description of the organization of its R&D projects, the distribution of time, and the consistency of the declared elements.

Beyond the justification to be provided, precise time tracking can also simplify the determination of the R&D capital asset base, help determine a price for a product or service resulting from R&D, or even facilitate, by comparison, the budgeting of a future R&D project to request other funding.

Today, Kronos (now a part of EPSA) launches its time tracking software

To offer its customers the possibility of effective time tracking, the Kronos Group (now a part of EPSA) has developed a secure online tool , which allows for detailed management of R&D time. The platform is fully configurable, practical and easy to use.

This tool allows the centralization and standardization of time data by project and by type of task, with functionalities such as:

Management of sites, projects, profiles,
Setting weekly working hours,
Filling times in hours/day,
Extracting the leaves of times past,
Activation of a configurable alert and reminder system,
Implementation of 3 levels of user rights for companies (administrator, project manager, classic user).

Need support?

Specializing in finding funding for your innovations, EPSA Belgium supports you throughout the process: analyzing your technological or non-technological projects, identifying specific aid depending on the degree of maturity, budgeting the amount of aid, drafting the file, support in the event of a tax audit, etc.

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