In the news project.
Business Policy
Professor:
March 2016
How to Procure a New Way of Working?
The article discusses the alignment of the procurement with the overall business strategy which is being considered by the technology company Microsoft for the improvement of its efficiency, reduction of costs, and enhancement of overall performance. Topics discussed include the modification of the organizational structure of the company, the need for the finance managers to focus on competencies, and the responsibility of the purchasing managers to handle the procurement initiatives.
Source: How to Procure a New Way of Working?. (2015). IESE Insight, (26), 64-65.
This magazine case study is related with our book resource-based view of the firm term.
perspective that firms’ competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.
With more than 128,000 employees in 120 countries, Microsoft had always employed a highly decentralized procurement model. Decisions were made on a country level according to local criteria. The global role of procurement was unclear. There was scant expenditure control, inconsistent global processes and a lack of strategic alignment with corporate leadership.
To address these issues, the company made two major changes to its organizational structure. First, it was decided that procurement would now depend on corporate finance at a global level, rather than on the business finance for each country, as before. Second, new regional procurement directors were appointed for Asia, Latin America and EMEA. These directors would report to the global Chief Procurement Officer in the United States.
New “category specialists” would advise procurement managers in areas such as technology, telecommunications, marketing and professional services. A new operations function was also established to manage metrics and maintain relationships...