Before we talk about supplier innovation, value creation, or strategic partnerships—we must get the basics right.
Too often, organizations aim for high-level procurement outcomes while skipping the foundational step: Tactical Procurement. This is where we build control, visibility, and compliance into the system. It’s where we master the “how” of buying before attempting to influence the “why.”
The journey from tactical to value-driven procurement is not about skipping stages—it’s about evolving deliberately:
Start with structured processes and policies Mature into data-driven sourcing, risk, and supplier management Then align procurement with enterprise value, sustainability, and innovation
Without a strong tactical foundation, the strategy won’t stick—and value will remain aspirational.
As procurement becomes a more strategic and adding value functions , it is essential for procurement professionals to use different strategic tools as part of their market analysis effort, as long as these tools fit to the purpose of the 5Ps of procurement function.
Some of these tools are:
1) Porter’s five forces – the tool’s original purpose is to provide an analysis of an organisation competitive macro environment. From organisational strategic perspective, firms use this tool to establish high barriers of entry and substitution to a achieve monopoly situation and establish sustainable competitive advantage. However, from buyer’s point of view the tool should be used in a way to lower barrier to entry and substitution to create a competitive market, this will help to reduce suppliers bargaining powers, lower the suppliers switching costs and increase buyers’ flexibility.
2) Kaplan and Norton’s balanced scorecard – is a strategic management tool which balances the financial performance of a firm with customers’ knowledge and satisfaction, internal business processes and learning and growth opportunity. However, in procurement dimension, this should be aimed to measure the contract-specific operational performance by measuring not only the financial operation of the supplier but also the other factors of the model.
3) Segmentation tools – the Kraljic matrix is the model that is used normally to assess purchases (goods and/or services) according to its strategic importance and the complexity of the supply market. It is used to helps organisations to develop effective category management approaches (e.g. e-procurement and blanket orders for routine and low value items and strategic partnership for strategically important material).
4) STEEPLE – is a common tool used to analyse organisations’s macro environment. STEEPLE tools can be effectively used as one of the Procurement analysis methods as long as is not misused with internal factors. For example, internal IT systems are often described under “technology” and the threat of them failing is often pointed out, whereas the broad technology trend and the risk of not keeping up-to-date is the factor that should be considered under this tool.
As procurement becomes a more strategic and adding value functions , it is essential for procurement professionals to use different strategic tools as part of their market analysis effort, as long as these tools fit to the purpose of the 5Ps of procurement function.
Some of these tools are:
1) Porter’s five forces – the tool’s original purpose is to provide an analysis of an organisation competitive macro environment. From organisational strategic perspective, firms use this tool to establish high barriers of entry and substitution to a achieve monopoly situation and establish sustainable competitive advantage. However, from buyer’s point of view the tool should be used in a way to lower barrier to entry and substitution to create a competitive market, this will help to reduce suppliers bargaining powers, lower the suppliers switching costs and increase buyers’ flexibility.
2) Kaplan and Norton’s balanced scorecard – is a strategic management tool which balances the financial performance of a firm with customers’ knowledge and satisfaction, internal business processes and learning and growth opportunity. However, in procurement dimension, this should be aimed to measure the contract-specific operational performance by measuring not only the financial operation of the supplier but also the other factors of the model.
3) Segmentation tools – the Kraljic matrix is the model that is used normally to assess purchases (goods and/or services) according to its strategic importance and the complexity of the supply market. It is used to helps organisations to develop effective category management approaches (e.g. e-procurement and blanket orders for routine and low value items and strategic partnership for strategically important material).
4) STEEPLE – is a common tool used to analyse organisations’s macro environment. STEEPLE tools can be effectively used as one of the Procurement analysis methods as long as is not misused with internal factors. For example, internal IT systems are often described under “technology” and the threat of them failing is often pointed out, whereas the broad technology trend and the risk of not keeping up-to-date is the factor that should be considered under this tool.
Procumart: the Power of the Procurement 