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June 30, 2025
What Is Procurement Maturity and Why It Should Matter for Modern Businesses

What Is Procurement Maturity and Why It Should Matter for Modern Businesses

Procurement is no longer just about purchasing goods and services, rather procurement has become a critical lever for strategic advantage, cost efficiency, risk mitigation, and innovation. However, not all organizations manage procurement with the same level of effectiveness or sophistication; this variation is what we refer to as Procurement Maturity.

What Is Procurement Maturity?

Procurement maturity refers to how advanced, strategic, and integrated the organizational procurement function is across key areas in the business such as – people, processes, technology, governance, and supplier management. How procurement is executed across the business – from basic, reactive purchasing to a fully optimized, value-generating function that supports business growth and innovation. Procurement maturity is typically measured using a structured model or framework that identifies the stages or levels of maturity, usually along a continuum from traditional to world class.

what is procurement maturity

Stages of Procurement Maturity

Although models and frameworks of procurement maturity may differ slightly, most procurement maturity models follow a similar progression through five levels:

World Class

    • Procurement is a strategic, core competency
    • High degree of customer and supplier satisfaction
    • Staffed with highly qualified specialists / other
    • High degree of automation
    • Metrics driven

Best In Class

    • Procurement is seen to create value
    • Good executive support throughout most of the organization
    • ERP system is in use
    • Metrics in place
    • Staff are competent in Procurement practices

Leading

    • Procurement seen as “value add” function
    • Some pursuit of best practices
    • Employees are engaged
    • Some Executive support 

Emerging

    • Procurement seen as “value add” function
    • Some pursuit of best practices
    • Employees are engaged
    • Some Executive support 

Traditional

    • Procurement an afterthought
    • Not a core competency
    • Employees disengaged
    • No interaction between Procurement and supplier base

The Key Elements of Procurement Maturity

Procurement maturity is multi-dimensional concept which includes:

  • People and Skills: Is the procurement team trained, certified, and strategically capable?
  • Processes: Are there clear, efficient, and standardized procedures?
  • Technology and Tools: Is procurement digitized and automated using modern platforms?
  • Governance and Compliance: Are policies enforced and procurement activities transparent?
  • Supplier Relationship Management: Are suppliers seen as partners in value creation?
  • Data and Insights: Is procurement data accurate, accessible, and actionable?

So Why Does Procurement Maturity Matter

Improving procurement maturity brings measurable benefits:

  • Cost Savings: Through strategic sourcing and demand management.
  • Risk Management: Better control over supplier risk, regulatory compliance, and market exposure.
  • Operational Efficiency: Reduced cycle times, fewer errors, and improved service levels.
  • Innovation and Agility: Closer supplier collaboration enables innovation and faster responses to change.
  • Strategic Value: Procurement contributes to sustainability, growth, and competitive advantage.

Organizations with mature procurement functions are better equipped to thrive in a competitive and volatile business environment.

Summary

Procurement maturity is a vital benchmark of how well an organization manages its supplier base, spending, and sourcing strategy. Moving up the maturity curve requires commitment, investment, and a vision that sees procurement not just as a cost centre, but rather as a strategic enabler of value.

Whether your organization is just beginning the procurement journey or aiming to lead in your industry, understanding and improving procurement maturity is a powerful and essential step toward greater business success.

janineh@tkjprocurement.com | etienneh@tkjprocurement.com | www.tkjprocurement.com

August 13, 2024
Understanding the Differences Between Source-to-Payment and Procure-to-Payment Software

Understanding the Differences Between Source-to-Payment and Procure-to-Payment Software

Managing procurement and payment processes efficiently is crucial for maintaining operational excellence, financial health and control. Two types of software systems that play crucial roles in these processes are Source-to-Payment (S2P) and Procure-to-Payment (P2P) software. While these software systems may seem similar, they serve different functions and address distinct aspects of the procurement and payment lifecycle. Here’s a closer look at the differences between S2P and P2P software:

procurement technology
modern procurement

1      Scope and Focus

Source-to-Payment Software:

Scope: S2P software covers the entire procurement lifecycle, starting from the initial need identification and sourcing phase to the final payment for goods or services. It integrates various processes, including supplier relationship management, contract management, procurement, and payment.

Focus: The primary focus of S2P is to optimize the end-to-end procurement process. This includes identifying and evaluating suppliers, negotiating contracts, managing supplier relationships, and ensuring compliance with procurement policies.

Procure-to-Payment Software:

Scope: P2P software specifically focuses on the procurement and payment phases. It streamlines the processes involved in requisitioning goods or services, processing purchase orders, receiving goods or services, and handling invoice approvals and payments.

Focus: P2P is primarily concerned with the efficiency of purchasing and payment processes. Its goal is to ensure that the purchasing cycle is smooth, that invoices are processed accurately and promptly, and that payments are made on time.

2      Key Components and Functionalities

Source-to-Payment Software:

Sourcing: Tools for finding and evaluating suppliers, conducting auctions, and managing tenders and RFx processes.

Contract Management: Features for creating, negotiating, and managing contracts, including compliance tracking and renewal reminders.

Procurement: Integrated procurement functionalities that align with sourcing and contract terms.

Payment: While S2P includes payment processing, it is not its primary focus. Payment processing in S2P systems is often more about ensuring compliance with contract terms and less about the transactional details.

Procure-to-Payment Software:

Requisitioning: Tools for creating and managing purchase requisitions.

Purchase Orders: Features for generating and managing purchase orders, including approvals and tracking.

Receiving: Functionality for recording the receipt of goods or services and matching them with purchase orders.

Invoice Processing: Tools for receiving, validating, and approving invoices, ensuring accuracy before payment.

Payment: Systems for processing and tracking payments, managing payment terms, and handling vendor queries related to payments.

3      Integration and Interdependencies

Source-to-Payment Software:

Integration: S2P systems often integrate with various other enterprise systems, such as Enterprise Resource Planning (ERP) systems, to provide a comprehensive view of procurement and financial data. This integration ensures that sourcing decisions align with financial planning and reporting.

Interdependencies: Because S2P spans a broader range of activities, it relies on seamless integration with supplier management, contract management, and procurement modules to function effectively.

Procure-to-Payment Software:

Integration: P2P systems typically integrate with ERP systems for financial management and accounting purposes. Integration with inventory management and logistics systems may also be necessary to track goods and services throughout the procurement cycle.

Interdependencies: P2P processes are closely linked to accounts payable and financial reporting. Effective P2P systems ensure that procurement activities are aligned with financial controls and reporting requirements.

4      Implementation and Use Cases

Source-to-Payment Software:

Implementation: Implementing an S2P system often involves a more extensive setup due to its broader scope. Organizations may need to invest in training and change management to fully leverage the capabilities of S2P systems.

Use Cases: Ideal for organizations that require a comprehensive solution for managing the entire procurement lifecycle, including strategic sourcing and contract management, in addition to procurement and payment.

Procure-to-Payment Software:

Implementation: P2P systems can often be implemented more quickly than S2P systems due to their more focused scope. They are usually easier to deploy and integrate with existing accounting and financial systems.

Use Cases: Best suited for organizations looking to streamline and automate their procurement and payment processes, with a focus on efficiency, accuracy, and compliance in purchasing and payments.

5      Conclusion

While both Source-to-Payment and Procure-to-Payment software aim to enhance procurement and payment processes, they cater to different needs within the procurement lifecycle. S2P software offers a comprehensive solution that spans from sourcing to payment, addressing a broad range of procurement activities. In contrast, P2P software focuses specifically on optimizing the procurement and payment phases, ensuring efficiency and accuracy in these critical processes. Understanding these differences can help organizations choose the right software solution based on their specific needs and objectives, ultimately leading to improved procurement efficiency and financial management.

janineh@tkjprocurement.com | etienneh@tkjprocurement.com | www.tkjprocurement.com

May 1, 2024
The Modern Procurement Department
modern procurement

The Modern Procurement Department

In the everchanging landscape of modern business, the procurement department has become a cornerstone in the architecture of organizational success. Evolving from its traditional role of simply acquiring goods and services, the modern procurement department has transformed into a strategic powerhouse, driving efficiency, innovation, and sustainability across the entire supply chain.

Gone are the days when procurement was confined to negotiating prices and issuing purchase orders. Today, it is a multifaceted function that encompasses strategic planning, supplier relationship management, risk mitigation, and technological integration. The procurement department is no longer relegated to the back office; instead, it is increasingly positioned at the forefront of decision-making processes, collaborating closely with other key stakeholders to achieve overarching business objectives.

One of the defining characteristics of the modern procurement department is its strategic orientation. Rather than focusing solely on cost savings, today’s procurement professionals are tasked with delivering value to the organization in various forms. This may include identifying opportunities for process optimization, fostering innovation through supplier partnerships, or ensuring compliance with regulatory standards and ethical practices. By aligning procurement strategies with broader business goals, organizations can unlock new sources of competitive advantage and drive sustainable growth.

Furthermore, the modern procurement department recognizes the importance of supplier relationships in achieving long-term success. Rather than adopting a transactional approach, procurement professionals now seek to cultivate strategic partnerships with suppliers based on mutual trust, transparency, and collaboration. By engaging suppliers as strategic allies rather than adversaries, organizations can leverage their expertise, drive innovation, and mitigate supply chain risks effectively.

Technology plays a pivotal role in the modernization of procurement practices. Automation, artificial intelligence, and data analytics are revolutionizing how procurement processes are conducted, enabling greater efficiency, accuracy, and agility. Advanced procurement software platforms offer features such as spend analysis, supplier performance monitoring, and contract management, empowering procurement professionals to make data-driven decisions and optimize resource allocation effectively.

Moreover, digitalization enables greater visibility and transparency across the supply chain, allowing organizations to identify potential bottlenecks, track inventory levels in real-time, and anticipate market fluctuations more accurately. Emerging technologies such as blockchain hold the promise of revolutionizing supply chain management by enhancing traceability, security, and integrity throughout the procurement process.

In addition to driving operational excellence, the modern procurement department also plays a critical role in advancing sustainability goals. As businesses face increasing pressure to minimize their environmental footprint and promote social responsibility, procurement professionals are tasked with integrating sustainability criteria into supplier selection and sourcing decisions. By partnering with eco-conscious suppliers, implementing green procurement practices, and adopting circular economy principles, organizations can reduce waste, mitigate environmental risks, and enhance their reputation as responsible corporate citizens.

In conclusion, the modern procurement department represents a paradigm shift in how organizations approach sourcing, purchasing, and supply chain management. By embracing strategic thinking, fostering collaborative supplier relationships, harnessing the power of technology, and championing sustainability initiatives, procurement professionals are driving transformative change and positioning their organizations for long-term success in an increasingly competitive global marketplace. As businesses continue to evolve and adapt to new challenges, the modern procurement department will remain a linchpin in driving innovation, resilience, and value creation across the entire enterprise.

janineh@tkjprocurement.com | etienneh@tkjprocurement.com | www.tkjprocurement.com

January 21, 2021
Procurement Technology
procurement technology

Procurement Technology

At TKJ Procurement the procurement transformation process starts with our Capability and Maturity Model (CAMM) assessment.

The CAMM assesses the enabling technologies employed in the procurement environment; the sub-capabilities considered includes the assessment of technology in the Source to Contract cycle as well as the Purchasing to Payment value chains.

Our assessment considers how technology solutions are used and the level of automation.

Procurement Technology Solutions in and of itself does not result in procurement maturity, in our experience to achieve procurement maturity technology solutions should be enabling the procurement strategy. The value of procurement technology should not just be to do more with less, rather the full value of procurement technology solutions are when the procurement department is able to do things that it could not or did not do before. This includes achieving objectives such as:

  • Generating Management information to ensure effective oversight and improvement across the value chain.
  • Driving procurement efficiencies
  • Driving a strategic and collaborative business partner
  • Creating value for your client.
  • Designing, developing, and implementing holistic and sustainable solutions which match the organizational objectives

Before embarking on a roll-out of procurement technology solutions we suggest managers answer these questions:

  • How does the procurement technology achieve the objectives of the company’s business strategy?
  • Is a company Data Strategy or Data Governance approach available to support the effective usage of the procurement technology?
  • Is a plan available to acquire or grow the skills that the company will require to support the procurement technology strategy?
  • Is a plan available for training, retraining or re-skilling of employees whose positions become redundant due to automation?
  • Does the technology strategy spell out the infrastructure requirements to support the strategy?
  • Is a plan available to manage and deal with unintended consequences of procurement technology solutions implementation?

Over the next few months, I will unpack how procurement technology solutions can contribute to procurement maturity and what organizations can and must do to make this possible.

janineh@tkjprocurement.com | etienneh@tkjprocurement.com | www.tkjprocurement.com

November 6, 2020
Beneficiary Management System Part 4

Beneficiary Management System
Part 4

Implementation of the Beneficiary Management System, Lessons Learned

When planning the Implementation of the Beneficiary Management Systems (BMS) it is best to consider this part of the journey as a change management project. Suppose we have done everything correct in the process of developing the BMS: the processes of application, decision and development of beneficiaries are reflected correctly in the system, the data requirements are thoroughly examined and the software provides the necessary capabilities for capturing, accessing, using and reporting important data in a user friendly form. Still the process of implementation of a new software may experience certain difficulties and there are important factors that should be considered in advance to ensure a smooth transition to everyone happily adopting and using the new software. We should separate these factors into three groups: technical, process/data and human related.

Technical Factors

product warrantyIf the system is developed according to the principles of the modern agile approach, all functionalities would be tested not only by the software development company but also by a dedicated team from the client. This process allows for on-time corrections of functionalities to match the expectations and the needs of the users. At the time of implementation of the software there should be no surprises…theoretically. But in reality, depending on the number of users and complexity of the BMS version there is still a chance that something might not work as expected. The reasons may include undiscovered bugs, unexpected difficulties with connectivity and other. Although these situations do not happen often, ensuring a warranty period with the provider can definitely mitigate the negative consequences should something like this occur.

Process / Data Related Factors

In our experience we have noticed that people naturally think of the most typical situations, user actions and data processing when describing their expectations of a system. In reality however processes may not be applied as described or there may be certain exceptions of the user actions or data collection which, although rare, may not be considered during development of the software. If discovered after the software is already operational, this can lead to understandable frustration. However, to resolve the problem either the users need to be creative and find workarounds (which can cause other problems), or additional programming work will be required which adds time and cost to the project of implementation. This challenge is often unpredictable. The best approach to addressing this challenge it prevention, such as talking to as many potential users as possible and taking their view on what could in reality work differently than the prescribed processes, or asking directly what might work differently in practice or where it is possible to have an exception. With time we have found that experienced consultants, or business process analysts can be very helpful in this regard with their developed skill to sniff such possible deviations

“experienced consultants, or business process analysts can be very helpful”

who wants to change The Human Aspects

Human Related Factors

Not everyone will typically be happy to start working with new software. There is always the learning curve that requires extra effort outside the comfort zone of a person. To address this, we have found that clients who exercise a change management approach manage to implement the solution easier, with less effort and with minimum resistance and struggle from users. Some of the lessons learned about this include

  • Create positive expectations by building awareness of what the new software would do and what are the reasons of its introduction to the company. Stress the benefits of the system and WIIFM (what is in it for me) for different target groups. Awareness creates desire which leads to less resistance at implementation

  • Involve representatives from different types of users in the process of defining requirements, testing and providing feedback. One of the benefits of that is that the software functionalities are considered better and on time. But the other aspect is that, when happy with what they experience, these people spread the word across the organization. This could be combined with communication strategy to ensure visibility of the project.

  • Spend enough time and effort to train people using variety of methods: online and/or face-to-face training, mentorship and availability for questions and support during the inevitable difficulties until people feel comfortable with the software. Having a team of “super users”, mentors or peer coaching techniques can have a strong effect on the ability of users to come to grips with the software and to minimize their frustration or resistance.

Contact us directly if you are interested in finding out more about the BMS at info@tkjprocurement.com

janineh@tkjprocurement.com | etienneh@tkjprocurement.com | www.tkjprocurement.com

September 17, 2020
Beneficiary Management System Part 3

Beneficiary Management System
Part 3

Measuring Impact with the Beneficiary Management System

Baseline Data

The initial information forms the baseline data and the basis for measurements. It is important to accurately capture the initial status of the beneficiary businesses. Typically, collected data are:  number of employees and clients, value of contracts, turn-over/revenue, profitability, value of assets, market penetration, productivity, management effectiveness, etc. The baseline data may also include financial statements and various company registration, shareholding, tax documents etc. By comparing the base data with data captured after various stages of intervention, progress can be determined. Eventually a picture of growth in market share, employee numbers, productivity, service and product offering, profitability etc. unfolds.

TKJ Procurement

How to Report with BMS

TKJ Procurement

By defining the reporting requirements in the planning stage i.e. what do you want to report on and what data to be captured and compared  to achieve certain reporting requirements,  the BMS is able to provide detailed or high-level reports as and when required. The reporting capabilities are further enhanced as information can also be downloaded to generate ad-hoc reports.

TKJ Procurement

Because of this approach the BMS is customizable to meet individual client requirements, can be implemented across various business sectors and development programs. As such, the BMS becomes a multifaceted tool able to optimize impact assessment guided by automated reporting. 

janineh@tkjprocurement.com | etienneh@tkjprocurement.com | www.tkjprocurement.com

August 5, 2020
Beneficiary Management System- Part 2

Beneficiary Management System – Part 2

What optimization does a Beneficiary Management System enable

The Beneficiary Management System (BMS) is designed to measure the true impact of the investment on the beneficiary. This is achieved by supporting every stage of the beneficiary management processes, which are typically executed through manual operations.

BM Systems

How do we know what the effect is of the developmental activities if we do not measure it?

Donors are often engaged in numerous development activities and employ significant resources with high hopes of achieving results. A Beneficiary Management system is an invaluable asset in capturing data and providing information for analyzing the effectiveness and efficiency of development efforts.

The BMS can be configured to track all important data related to development activities, measuring the spend in rand value and cost of time and resources at every stage, in this way the information captured into the BMS becomes the source information for providing proof of both activities, impact and:

  • Allocating and calculating cost
  • Allocating cost spent per beneficiary or region or sector etc.
  • Summarized data for annual, quarterly, monthly reporting and sustainability reports
  • Case studies / Marketing campaigns/ media reports
  • Data for conference presentations and academic papers
  • The input for regulatory requirement i.e. B-BBEE scorecard reporting etc.
  • Evidence in the event of a query / complaint / issue with a beneficiary
  • Documented evidence of the development route of the beneficiary – from onboarding, through diagnostics and the development plan, to exit 

The BMS also allows for the reporting of  non-monetary values which typically  is more difficult to track and can easily amount to millions but not captured and reported on, and consequently skewing the representation of what is required to effectively develop and grow a beneficiary. Our BMS allows also the following data be captured and reported:

  • Capture management and administrative costs
  • Capture money spent on development of beneficiaries
  • Capture information on the type and value of “in kind” contributions from partners and stakeholders
  • Capture information on time and value spent on development of beneficiary businesses, discounted rates e.g. subsidized premises, use of assets and facilities, etc.
  • Capture the nature of the interventions per beneficiary (to eventually determine which interventions had best impact)
  • Capture details on improvements in a beneficiary, based on pre-determined progress measurements

How do we keep all program stakeholders on the same page?

The project managers and staff which are directly involved in development activities are often well informed about all details of what is being done. But is that information available in summarized, comprehensive form for taking managerial decisions? How to keep all stakeholders informed of what is going on and what has been achieved?

The BMS is designed to provide powerful reporting opportunities. Regular and ad-hoc reports can provide detailed or high-level reports as and when required.

Examples of report elements include:

  • Overall strategy implementation costs
    • Cost per programme element
    • Costs per beneficiary (average or actual)
    • In-kind contributions (per stakeholder or per beneficiary)
    • Number of beneficiaries overall and/or per strategy element or program
    • Impact per beneficiary, program, site or nationally (can include growth in the business(es) – jobs, turnover, market share, profitability)

Over a period of time of accurate data input, reports can be  used to determine exactly what it takes to develop a beneficiary from one level to the next, which interventions had the most impact, what had been spent in cash and kind over time to support beneficiaries , the direct and indirect impact that it had on economic growth of the beneficiary  and the reach of a program regionally or beyond.

Look out for the next post on: Measuring Impact with BMS

Contact us directly if you are interested in finding out more about the BMS at info@tkjprocurement.com

June 15, 2020
Beneficiary Management System

Beneficiary Management System

Why is a Beneficiary Management System a Necessary Tool?

In the contemporary business world, the need for software support is already a norm rather than necessity. The development industry is also catching up. More companies are beginning to realize the need for solutions that have the ability to track and manage the process for development of different types of beneficiaries

TKJ Procurement Consulting and Training together with our partner Addit Software are in a position to provide an end-to-end solution that is designed to address a wide spectrum of needs related to beneficiary development. Our Beneficiary Management System (BMS) is a web-based solution:

  • that can be accessed and used simultaneously from multiple locations
  • has predefined processes and workflows that can be adapted for different purposes
  • allows for monitoring of investment and expenditure related to beneficiary development
  • measures the impact through a number of electable factors such as jobs creation, turnover increase etc. 

overview of main benefits

 Our BMS makes for a very useful Monitoring &Evaluation tool as well. The system can be used for a variety of different purposes ranging from procurement to enterprise development, all types of business process optimization and management reporting.

The BMS can also be applied in working with different segments including corporate businesses, small enterprises, youth, and women entrepreneurs. Look out for our next posts on: What management optimizations can BMS facilitate or contact us directly if you are interested in finding out more about the BMS!

March 12, 2020
Supplier Relationship Management and Third-Party Risk Management Model

In this issue
12 March 2020:

Supplier Relationship Management and Third-Party Risk Management Model

Introduction

In our interactions with clients we find that organisations have a very one-dimensional approach to Supplier Relationship Management (SRM). We find the value of SRM is focused only on cost reduction and SLA management.

This blog is focused on the implementation approach that was followed in Project Ignite to introduce and embed the principles of SRM.

“Procurement without supplier management is like sales without account management. It does not work.”
(Lars Kuch Pedersen, LeanLinking)

Current State of SRM

  • One dimensional approach addressing one function, such as performance with small sets of suppliers.
  • Heavily focused on transactional stage of vendor life cycle
  • Value of SRM is only tied to cost reduction and SLA management
  • Viewed and executed as set of tactical activities
  • SRM and Vendor Management activities are dispersed through the organization with limited control.

Future State of SRM

  • Suppliers Relationship Management intrinsic to the success of the organization through the use of strategy and advanced vendor management framework.
  • Holistic view of suppliers across the various business functions
  • Advanced skills in data analytics, financial review and risk management
  • ROI measurement in terms of strategic business outcomes.
  • Define strategic vendor management intent, goal and relationship outcome
  • Governance expanded and extended across internal teams and strategic vendors.

Migration

  • Assess current maturity against desired state
  • Implement Strategic Vendor Management Framework
  • Clarify, standardize and streamline Vendor Management Process

Value can be derived through strategic and performance-based collaboration

strategic sourcing

Without rigorous contract management 75% of sourcing savings can disappear withing 18 months.

SRM Process – Detailed Approach

supplier phases

Cross Functional Team Driving SRM

internal CFT

SRM and Risk Segmentation Model

strategic vendor segmentation model
3rd party risk assessment tool

Initiate Supplier Relationship Management Plan

supplier chart

Supplier Management Reviews

agenda for interactions with suppliers

Supplier Management Review Results

performance review dashboard

Summary

To secure the suppliers commitment to the relationship and continuous high service delivery, reward programs such as Supplier Compliance Certificate or Supplier Recognition can be implemented within the SRM Plan.

There are Several benefits associated with supplier relationship management, and they all culminate in a healthier bottom line as we saw in Project Ignite.

  • Reduced costs
  • Increased efficiency
  • Consolidation of the supply chain
  • Management of supplier performance
  • Continual improvement of operations
  • Improved risk and compliance profile

janineh@tkjprocurement.com | etienneh@tkjprocurement.com | www.tkjprocurement.com

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