PROCUREMENT 101

How to Create Your Procurement Operating Model

Introduction

As procurement continues to play a more strategic role in driving business value, the need for a well-defined operating model has never been greater. An effective model aligns people, processes, and technology and ensures that procurement delivers not just savings, but also agility, compliance, and measurable impact. 

At Optis, we guide organizations through the development of operating models that are tailored to business needs, scalable across regions, and sustainable long after go-live. Keep reading to discover how to create one that sets your team up for long-term success. 

The blueprint for long-term success

A procurement operating model defines how procurement functions throughout your organization, encompassing structure, governance, roles and responsibilities, processes, and technologies. In short, it’s the blueprint for how procurement delivers services, engages with the business, and supports strategic goals. 

A well-executed operating model serves as the foundation for: 

  • Consistent execution: Standardized processes that reduce errors and inefficiencies 
  • Strategic alignment: A clear connection between procurement and business objectives 
  • Scalability: A structure that supports growth, expansion, or transformation 
  • Adoption and enablement: Clear roles and responsibilities that foster accountability and ownership 

Key considerations when building your model

1. Level of Centralization

Your model should reflect the level of control needed across business units and regions. Common structures include:

  • Centralized: Procurement activities and decisions are consolidated under one team, promoting consistency and control.
  • Decentralized: Business units or regions manage procurement independently, allowing for greater flexibility but reduced standardization. 
  • Center-led: A hybrid approach where strategic sourcing is centralized, but execution is distributed.
2. Regional Considerations

For organizations spanning multiple geographies, considerations like local procurement needs, regulations, supplier markets, and language requirements must be factored into your model. This might require regional hubs or embedded roles that align with both global standards and local execution.

3. Talent and Team Capabilities

Structure your model around the capabilities required for success. Take proper inventory by asking the following questions: Do you need strategic category managers? Contract lifecycle experts? Transactional buyers?  

Assess both current and future skill sets to ensure your team can evolve with the business. 

4. Business and Procurement Partnership

A strong operating model defines how procurement collaborates with internal stakeholders. Whether through embedded category managers or intake channels for project-based sourcing, the aim is to ensure procurement works alongside the business to drive value, not process orders. 

5. Technology Enablement

The evolution of S2P platforms has shifted the role of procurement from transactional tasks to a strategic business function. Your operating model should clearly define how technology supports and streamlines key business activities, including:  

  • Intake and triage 
  • Sourcing and contract management 
  • Purchasing and approvals 
  • Invoicing and payment processing 

The more embedded and user-friendly your tools are, the more likely they are to drive adoption and data integrity. 

6. Transactional Support Needs

Decide where and how routine tasks like requisition creation, PO processing, and invoice reconciliation will be handled. Some organizations opt for the following, affecting both efficiency and scalability: 

  • In-house shared services teams
  • Offshore transactional centers
  • Third-party BPO providers

global model in action

The core components of an operating model should work together to support a global, scalable procurement function. Foundational elements like analytics, continuous improvement, and technology help ensure consistency, efficiency, and adaptability.

While each organization’s model will differ, this example offers a clear starting point for visualizing how structure and support functions can align to deliver strategic procurement value.

Conclusion

Creating a procurement operating model isn’t about following a template — it’s about designing a framework that aligns with your organization’s unique goals, structure, and maturity. Done right, it positions procurement as a strategic business partner, not just a cost center. 

At Optis, we’ve helped clients across industries design and implement procurement operating models that deliver measurable value and long-term success. If you’re ready to build or refine yours, we’re here to help. Contact us today to learn more about our operating model advisory services. 

Author

Amin Moh, Director

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