Discover how the role of the Procurement Centre of Excellence is changing, and what you can do to ensure the success of your own CoE.
The term Centre of Excellence (CoE) has become a buzzword in procurement – finding different definitions and purposes across every organisation. But at its core, the CoE remains a function that unites teams to share best practices and deliver support across the organisation.
In a recent webinar, our panel of procurement experts unpacked what the CoE truly means for procurement leaders today, how its role is changing year after year, and what it takes to implement a successful Procurement CoE yourself.
You can watch the webinar on demand to hear the full conversation and get an 8-point checklist to ensure success in your CoE journey. But in the meantime, read on to explore some of the key takeaways from the session.
- Graham Crawshaw – Global Content and Services Director and Board member, CASME
- Juan Carlos Hernandez Castilla – Director of Strategic Sourcing Center of Excellence, Vertex Pharmaceuticals
- Omer Abdullah – Co-founder and MD, The Smart Cube
What does the primary role of the CoE look like today?
Omer reminded us that the CoE hasn’t always had the strategic purpose it does today. “In the past, the CoE was mostly tasked with administrative responsibilities like vendor management—it was considered a data jockey, rather than a true data analysis function,” says Omer. “But now, we’re seeing its role quickly evolve into something more valuable.”
Feedback from those that attended supported this idea. When we asked the audience to rank the core purposes of the CoE today, the top three answers were:
- Providing procurement expertise and guidance to category managers through improved data (86%)
- Delivering centralised and standardised strategies, tools, and technologies (84%)
- Acting as a strategic consultant to procurement to solve problems (57%)
Of course, the primary role of the CoE will look different across every organisation. Some might focus on positioning their CoE as an accelerator of innovation, while others will use it to drive efficiencies. As Juan Carlos from Vertex Pharmaceuticals explained: “There’s no one-size-fits-all model for the CoE. Its role depends on the maturity and structure of your company.”
For Vertex, a major US biopharmaceutical company based in Boston, the CoE is all about supporting relationships across its organisation. “We’re focused on using our CoE to maximise value creation and improve partnerships between our internal stakeholders,” explained Juan Carlos. “Ultimately, its role is to drive consistency and efficiency.”
How is the role of the CoE changing?
The pandemic forced nearly every organisation to adapt parts of their operations – and the CoE was no exception.
“Following COVID-19, we all realised how fragile our supply chains can be,” says Juan Carlos. “So, at Vertex, there’s a growing interest in developing solid frameworks around our suppliers to strengthen relationship, performance, and risk management.”
From a wider perspective, the CoE is increasingly being used to equip category managers with insights that support smarter decisions. “We’re using our CoE to analyse our data and guide spending analysis, source analysis, cost modelling, and more,” says Juan Carlos. “Tasks like competitive bidding can have a really high impact on the organisation – and if you get that right, using data-driven negotiations, it can generate a lot of value.”
Critically, disruptions such as the pandemic reminded the procurement leaders that CoEs should always be ready to change. “The CoE should never remain static – it needs to keep shifting based on what’s important to the organisation,” explained Graham of CASME. “For example, when organisations put in new systems for RFx, having a central location for support, education and training can be valuable. But when the auctions become more business as usual, that support can be removed from the CoE and replaced with something more pressing – it’s a constant cycle.”
How can you make your CoE a success?
As CoEs are different for every organisation, there aren’t any hard and fast rules that can guarantee success. However, the webinar did reveal some insights on how to design a CoE that works for your organisation.
When CASME asked 200 organisations how they were looking to implement – or had implemented – a CoE, there were some common threads among the responses. “Many respondents expressed the importance of defining the role, objectives, and scope of the CoE’s responsibilities – also looking at the personnel and specialist teams it’ll need,” said Graham.
For Juan Carlos at Vertex Pharmaceuticals, the key to success was first identifying the maturity of the organisation: “Partner with your internal stakeholders and use industry benchmarks to truly understand where you are in the market right now. Then, you can create a clear value proposal for your CoE. For instance, our value proposal was to focus on analytics, market intelligence, our governance processes, and our supplier relationships.”
Omer also offered some valuable advice on keeping the CoE grounded in reality. “I think many organisations get carried away by the romance of what the CoE can achieve,” explained Omer. “It’s great as a long-term vision, but in the meantime, you need to focus on the practicality of where you are today. Think about what makes sense for your organisation now, rather than ten years in the future.”
Start your CoE strategy
A CoE can create huge value for your procurement function – and your wider organisation – but it’s critical you start on the right track.
Listen to the full conversation on demand to get the expert panel’s complete advice on how to design a CoE that works for your organisation, and how to measure its success. You’ll also find a handy 8-point checklist on how to ensure your CoE succeeds, and discover more results from the CASME survey and our audience poll.
Have CoE questions that you want answered fast? Omer has a helpful 7-minute primer on the role of the CoE in the procurement function – revealing how to avoid common pitfalls, and how to create a CoE model that effectively supports your wider organisation.