Increasing Purchase Order Coverage via Change and Stakeholder Management: Case Company X, Indirect Purchasing

Abstract

A lack in purchase order coverage and maverick buying can be common in the indirect purchasing functions, as other departments can consider it insignificant in spend. This research aimed to utilise change management and stakeholder management methods to approach the matter.

Issues were identified which can arise in the indirect purchasing department when undergoing a change towards e-procurement and centralisation of indirect purchasing teams. The project in company X began 2 years ago and it experiences challenges. The focus of this paper was on internal stakeholders as opposed to external stakeholders. Improvement suggestions along with recommendations provide the case company with practical means to improve their purchase order coverage via a situation analysis, including the current state, goals and how to attain them.

This research comprised a theoretical and empirical study which was based on the theoretical framework themes: indirect purchasing, change management and a combined theme of issues and stakeholder management dynamics. The methods involved qualitative and quantitative data collections via virtual, group and face-to-face interview types, core system data and a survey.

The results of the study offered a practical approach to the case company, which in turn could support other companies with similar issues in this area. Indirect purchasing’s expenditure and savings are essential to communicate, ensuring other departments comprehend its importance. Also, training is required which provides a foundation for such information exchange. Issuing adequate time and budgeting for change processes to adhere, including risk mitigation and resistance, plus effectively, concisely and continuously communicating change were key features in success. In addition to obtaining insight and managing stakeholders effectively with regards to the change process.