Blog

AI accelerates category strategies’ delivery

By Mark Hubbard | April 28, 2025

We have been utilising an AI-driven approach that dramatically accelerates category strategies’ delivery with some of our most progressive clients.

As discussed in our article on the next stage of AI and digital category management, AI is nowadays able to analyse and scrape market information, review existing and predict future spending, and propose value levers based on your business needs. This allows category managers to develop a draft category strategy in hours of work, not weeks.

The ‘Human x Machine’, augmented approach frees up category managers to focus on activities like stakeholder engagement, supplier management, business alignment, and innovation scouting – activities that can set your procurement operation apart from the competition.

The system and supporting approaches provide:

A consistent approach and holistic methodology for developing data-driven procurement and category strategies.
A step-by-step, guided approach to developing strategies, from spend analysis to AI-backed recommendations and initiative management and delivery.
High-quality stakeholder management and engagement approaches that support fact-based and meaningful discussions to deliver more value.

The integrated approach: Procurement, AI, and Expert Coaching

To realising the promise of high-quality category strategies and maximise the value delivery, an integrated approach to transforming the procurement sector influence most of your spend is need. We believe that a blend of foundational knowledge, an AI system, and expert coaching is needed to develop sustainable skills and embed technology within the procurement process. This combination of skills and tech unlocks high-speed delivery and value beyond sourcing.

When category managers understand the fundamentals of the approach and how the category strategy is derived, the AI system’s use will be optimised. Category managers need support throughout the development of the strategy in co-creating strategies, interpreting recommendations, and communicating their plans. An integrated approach that helps embed the technology in the operating model, provide the skills to use the solution through excellent and time-proven training, and improve hard and soft skills through coaching ensures maximum returns on the investment you make.

How does this work?

Understanding the organisation, processes, objectives, and capabilities is the starting point for the integrated approach. Ensuring all elements are designed around business priorities is key to ensure a short time to value of the transformation.

Using a skill assessment will allow to identify the key capabilities needed by category managers. The category teams’ skills and capabilities need to be at a level where the development of category strategies is fully effective. This usually involves targeted training looking at procurement, system, and change management skills and behaviours, next to basic tool enablement training.

After providing the initial training, category teams are encouraged to utilise the AI system to its full extent and deliver category strategies with deep insight, a clear link to business requirements, and initiatives that deliver broad value. Co-creation of strategies with stakeholders is a critical success factor for maximising the impact and adoption of category strategies and effectively delivering value. The process of strategic alignment, both embedded in the tool and fostered through coaching, ensures that any activity undertaken will deliver genuine value where it matters most.

AI accelerates category strategies' delivery

The system tracks the progress across all category strategies in the organisation – current status, strategies developed, initiatives by strategy. It is always up to date, which frees up considerable time previously spent on reporting that can now be used to look for ways to unblock stalled initiatives or start additional initiatives.

The integrated approach drives consistency in both delivery and output. Once in place, this consistency increases governance, improves communication, and increases the impact of Procurement.

Future Purchasing has years of experience working with teams on optimising their operating model to incorporate Procurement AI systems, enable category managers with the skills needed to succeed in today’s procurement world, and co-create and deliver strategies and value to maximise business impact.

If you would like to talk to me about an AI-driven approach that dramatically accelerates category strategies’ delivery email me below or click on the “Let’s Talk “button below to get direct access to my diary.

About Mark Hubbard

Director

30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Member

Contact Mark Hubbard

Category management vs strategic sourcing – so much fuss for little difference?

By Mark Hubbard | April 1, 2025

From our research, it is clear that many organisations still see category management as simply another term for strategic sourcing. However, we believe that category management and strategic sourcing focus on different aspects and have distinct goals.

What is category management in procurement

Category management is the process of organising spend into groups of related products and services according to their characteristics, market dynamics, or business objectives. It is a strategic end-to-end process for buying goods and services that aligns business goals and customer requirements with supply market capability and maximises long-term value for the organisation.

It is a cross-functional activity that requires organisations to work collaboratively to understand internal stakeholder needs and examine category spend, the supply market, and suppliers to identify opportunities for savings and value improvement as well as aligning your procurement strategy with your business goals.

Category management helps build long-term relationships with suppliers and leverages their expertise and innovation. It is a way to manage categories for their whole life-cycle, and it sits above procurement activities, such as strategic sourcing, Supplier Relationship Management, or Contract Lifecycle Management. Category strategy outputs fit into four areas — sourcing, SRM, contracting, and internal operational change and implementation.

Category Management vs strategic sourcing – so much fuss for little difference

What is strategic sourcing

Strategic sourcing is a procurement process used to source goods and services from the available supply market at a specific point in time. It is aimed at selecting the right suppliers to achieve the lowest cost while meeting the specifications and required timelines. Its primary goal is to achieve price/cost reduction via aggregation and consolidation through negotiations. The process includes evaluating third-party requirements, analysing current spend, identifying potential suppliers, developing the route to market strategy including single/multi suppliers, lotting strategies, etc., and then running a supplier selection process or RFP and negotiating contracts. It is an effective way to deliver sustainable cost savings and promote healthy market competition between suppliers. It is often an output from a category strategy.

Category management vs. strategic sourcing – subtle differences, big implications

While many steps and processes are similar across Category Management and Strategic Sourcing, there are some subtle differences that with significant implications on how both are applied.

i. Strategic sourcing is focused on price reduction. Category management is focused on broader business value, such as risk, revenue, innovation, and cost, which may also include buying less (e.g., demand management) or buying smarter (e.g., specification management).

ii. Strategic sourcing is a procurement process focused on “sourcing events” for selecting suppliers that requires limited business input outside of specifying the requirements.

Category management on the other hand is an enduring cross-functional business process that requires intensive collaboration with a broad set of business stakeholders to develop deep insights on internal business requirements to create and implement wide ranging strategies to enable the organisation to behave as an intelligent customer in “what it buys”.

iii. Strategic sourcing provides a good understanding of the external market at a specific point in time and helps the organisation to be good at “how it buys”. Category management delivers deep external market expertise around the product structure, supply chains, the supplier landscape, and regulatory and risk factors.

iv. Category management delivers deep internal and external market expertise, cohering stakeholders, and providing governance to enable the organisation to behave as an intelligent customer in “what it buys”. Strategic sourcing alone provides a good understanding of the external market at a point in time and helps the organisation to be good at “how it buys”.

v. Strategic sourcing is usually focused on solving a specific demand and negotiating respective contracts with a timeframe of 1-3 years. Category management determines the go to market and approach for an entire category, which can span multiple events, and focuses on cohering stakeholders (demand), and providing governance to steer the organisation in a defined direction over a 3-5 year horizon.

Combining Category Management and Strategic Sourcing to execute strategies for increased value

In summary, category management and strategic sourcing should not exist in isolation. Category management provides the business intelligence and governance to maximise business value and, when combined with strategic sourcing, enables you to execute the procurement aspects effectively — so you are good at both what you buy and how you buy it.

Where organisations focus on one over the other, they often either end up with category strategies that struggle during implementation or with disconnected approaches for the same goods and services across regions, countries, or business units. Developing an Operating Model that clearly acknowledges and defines processes, roles and responsibilities, and handover points will ensure that organisations achieve the best of both methodologies and create increased customer value. This will become even more important with the advancement of digital tools and AI in both areas and the advancement of data-driven procurement.

If you want to discuss how your organisation is performing and how to design an operating model for seamless best-in-class processes, please speak to us about our maturity assessment.

About Mark Hubbard

Director

Contact Mark Hubbard

How to accelerate your Category Management adoption in 2025

By Future Purchasing | March 17, 2025

Maturity assessments have a bad name. While leadership teams search for ways to increase resource efficiencies and effectiveness, many organisations lack the structured approach to review their processes and identify areas for improvement.

This article outlines how to perform a maturity assessment of your category management practices and translate the findings into actionable improvement opportunities and accelerate adoption.

The performance of your procurement organisation is relative

Everything is relative in Procurement. We collect three bids to assess the relative competitiveness of proposals. We create strategic options and scenarios to determine the implications of our choices. We are hardwired to compare ourselves to others. That is why the desire for benchmarks will never go out of style.

We perform the biggest benchmarking study in Procurement for Category Management and publish the bi-annual Global Category Management Report, now in its 6th edition. We are neither analysts nor researchers but strong believers that understanding trends and patterns allows us to identify opportunities for improvement. Just like analysing spend helps you identify new savings opportunities.

Procurement thinks it is better than the numbers say it is

In our recent webinar, ‘From Benchmarks To Traction’ we discussed how to embed Category Management across the Operating Model, how to build effective category teams, and how to continuously improve processes. The discussion was based on the findings and insights of the 2024 Global Category Management Report, the most comprehensive source of benchmarking for Category Management.

The Report found that 68% of available value remains uncaptured across the value dimensions of cost savings, risk reduction, and stakeholder value. While certain reasons for value leakage exist across industries and companies, many aspects are highly specific and unique to an organisation.

External benchmarks are a powerful tool for assessing the maturity of organisations and processes

Leveraging comparative insights not only helps to gain an understanding of your specific situation but also helps identify areas for improvement and opportunities for transforming your organisation more thoroughly. Unfortunately, verifiable benchmarks are hard to come by. And turning them into practical actions is even harder.

If done right, benchmarking can help you

Identify strengths and improvement opportunities for your organisation
Understand the efficiency of your Procurement resources
Create a common understanding and commitment across the leadership team
Establish a baseline for tracking performance over time, and
Estimate additional value available in cost savings, risk reduction, and stakeholder value by becoming a high-performing organisation.

Insights without actions are useless

Nobody has ever been promoted for admiring a problem. Benchmarking is not done for the sake of benchmarking but to generate insights. And insights need to be acted upon. An assessment, therefore, must break down the findings in a structured format and into digestible opportunities that the organisation can act upon.

The identified improvement opportunities should be evaluated for their ease of implementation and their expected impact. Depending on the size of the analysis and the number of opportunities, they should be clustered and spread across a realistic time horizon. By breaking them down this way, you create a roadmap of opportunities towards a desired end state that can be broken down into concrete steps and actionable tasks.

Don’t do this alone

20+ years in Procurement consulting and 100+ projects have taught us that theory is great until it meets the real world. For over a decade, we have published the Global Category Management Report with more than 100 specific ideas for improving on the 60+ metrics it covers to help organisations benchmark themselves. We have seen progress in the results. Very slow progress.

That is why we have developed the Future Purchasing Maturity Assessment. Based on our Category Management Operating Model Framework, derived from 12 years of research with Henley Business School, the maturity assessment is designed to provide a specific evaluation of your situation, identify practical opportunities, and develop a focused roadmap of initiatives for strengthening your Category Management approach.

It benchmarks your performance versus global leaders and your sector to pinpoint where you are on your Category Management journey and to identify necessary adjustments to the current operating model that will have a big impact on overall process adoption and value delivery. The result of the assessment is a practical list of opportunities that turn Category Management into a competitive advantage and value driver for your organisation.

The Path to Category Management Excellence

Our overall objective is to help you reach excellence in category management and accelerate CatMan adoption. Excellence can be reached in areas like

Resource efficiency
Strategic alignment with business priorities and stakeholders
Savings and value delivery, and
Operational and supply chain risk reduction

The assessment is structured around the six proven dimensions of category management excellence:

Category Management strategy: defines how category management supports the delivery of the organisation’s strategic objectives, establishes category management objectives and KPIs, and formalises the plan to adopt and improve category management.

Stakeholder engagement: explores collaboration and cross-functional working between procurement and its stakeholders. It looks at how well category management is aligned with stakeholder processes, whether strategies are co-created, and whether annual plans of category projects are jointly developed.

Organisation structure: focuses on how Procurement is set up in terms of the organisational design, roles and responsibilities, and time allocations. It considers the resource balance across the team to manage category strategies, sourcing, and supplier management.

Capability & mindset: builds the critical category, technical, and behavioural skills for the excellent application of category management. It includes the definition of category management specific competencies, skill development, and whether procurement leadership champions category management.

Process & technology: includes the core Category Management toolkit with process steps, templates, and guidance. The toolkit ensures inputs are consolidated into a strategy document, supports the identification of value levers, and governs strategy development, approvals, and implementation tracking. Technology is digitally enabling and automating some of these tools and processes. Examples include spend analysis, market intelligence, strategy development, and execution planning, with some being supported by AI.

Value impact: defines and evaluates the deliverables from category management, including category strategy quality, value delivery across cost savings, risk reduction, and revenue and stakeholder value.

Six Dimensions of Category Management Excellence

Step-by-step guide to performing the Maturity Assessment

Based on the outlined dimensions, Future Purchasing has developed an online survey to capture the current state of category management practices. The responses are consolidated, analysed, and benchmarked against industry leaders to form the basis for a high-energy 3-hour workshop with the procurement leadership team, where the initial findings for each question will be discussed and prioritised. The final recommendations are documented in a clear roadmap towards category management excellence – tailored for your organisation.

1 Planning

To initiate the assessment, we jointly define the benchmarking participants, align the timeline, and perform an alignment briefing with the Procurement Leadership Team. We establish the benchmarking assessment and communicate it to the involved participants.

2 Current Performance Assessment

The assessment starts with us building an understanding of your Procurement fundamentals around spend, KPIs, policies, operating model, org structure, etc. It also covers more specific questions around the CatMan adoption plan, ownership, spend coverage, 3-year value delivery, and the current pipeline.

The assessment includes a GAP analysis of CatMan processes and tools, training, and relevant interfaces like Supplier Relationship Management, Sourcing, and Contract Management. To validate the gained insights, we review your top 10 category strategies and interview category managers to understand their time allocation and challenges.

3 Maturity Benchmarking and Workshop

1-to-1 interviews are held with PLT to understand CatMan expectations and challenges with Category Management. All benchmarking participants complete our 15-minute online survey to provide information across the six dimensions.

Survey responses are consolidated, and we create a draft report v1 that covers each question and compares it with global CatMan leaders.

We then hold 3-hour PLT workshops to explore the results for each KPI in detail, confirm the current situation, and jointly develop tailored improvement recommendations. The workshop generates lots of energy, ideas, and alignment on the required changes for securing the untapped potential of Category Management.

Your performance will be benchmarked across 60+ KPIs

4 Maturity Report and Roadmap

Based on the workshop output, we estimate the scale of the opportunity in terms of value delivery and resource efficiency. We finalise report v2 with an analysis of available strengths, gaps, improvement recommendations, and a practical development roadmap.

We then hold a 1.5-hour feedback workshop with the PLT to agree on key findings, recommendations, and the scale of the opportunity. The final output is a full report covering all six dimensions and a set of targeted recommendations to maximise adoption and transform the team into a high performing CatMan operation.

Transformation is an action word, not something that happens to you

We work with you to develop recommendations that drive capability uplift and value delivery across the dimensions of the Category Management Operating Model. We detail out the identified opportunities and enable you to decide on the priorities you want to tackle. Together, we build a tailored roadmap to strategic procurement and category management excellence and accelerated adoption for your organisation.

If you are interested in driving the transformation of Procurement, we would love to hear from you. While our framework is standardised, your situation is unique and can require targeted improvements or heavy intervention. We’re here to help.

Future Purchasing

If you want to get more value out of your procurement spend, or you just want to know more about us, request a callback above or send us an email and we will come straight back to you.

Contact Future Purchasing

From Compliance to Innovation: Redefining Public Procurement in 2025

By Future Purchasing | February 25, 2025

Public procurement departments are navigating a complex landscape of challenges, including regulatory shifts, inefficiencies, difficulty building resilient supply chains, and an increasing demand for sustainability and transparency.

Rapid technological advancements and the pressure to deliver value while managing limited budgets further exacerbate these issues. The recently introduced Procurement Act 2023 aims to address some of these challenges; however, to become truly resilient, Commercial departments must take charge of their transformation.

This article highlights the key challenges in public procurement in 2025 and beyond and provides tips for procurement departments to mitigate them effectively.

Public Procurement Challenges in 2025

The challenges public procurement is facing can be grouped into three main categories:

Regulatory challenges
Market-related challenges
Organisational challenges

Regulatory Challenges

Complex regulatory environment and excessive bureaucracy

The regulatory challenges impacting public procurement are primarily attributed to complex legislation and excessive bureaucracy. There are over 300 regulations relating to public procurement in the UK. Government agencies have notoriously complex procurement processes, with administrative tasks and excessive bureaucracy often delaying the procurement of goods and services. In a recent conversation with the Institute for Government, John Healy MP, Secretary of State for Defence, said that his department was “mired in process and procedure”, adding complexity where simplicity is needed. “In procurement, we employ 11 checkers for every one decision maker. So no wonder it takes on average six years for a large program simply to go on contract,” he stated.

Furthermore, small and medium-sized enterprises (SMEs) and voluntary, community and social enterprises (VCSEs) often struggle to enter the public sector due to complex bidding requirements and high compliance costs. Moreover, when they lose a bid, SMEs and VCSEs struggle to understand why due to insufficiently detailed feedback and unclear evaluation criteria.

Market Challenges

Market volatility and inflation

Inflation and market volatility negatively impact procurement teams. Inflation creates budget pressure, meaning teams must deliver more with less. Furthermore, inflation often leads to fluctuating prices and unstable supply and demand dynamics, making procurement more complex. This challenge is exacerbated by a lack of visibility in government supply chains, which hinders risk management and makes it difficult to build a resilient supply chain.

Sustainable sourcing

Procurement departments are under increased regulatory and societal pressure to integrate green and ethical purchasing into their supply chains. However, implementing sustainable sourcing is challenging because there are no clear criteria against which to evaluate supplier sustainability, and it is difficult to track whether suppliers are delivering on their green commitments. Furthermore, sustainability goals must be balanced with the need for cost-savings, supply chain resilience and meeting industrial strategy objectives.

Organisational Challenges

Skills shortages

The procurement industry is experiencing significant skills shortages. According to the CIPS Procurement & Supply Salary Guide 2024, almost 60% of those responsible for hiring procurement and supply professionals globally have struggled to find and retain talent in the past 12 months. This difficulty severely impacts Commercial, leading to increased workloads for current staff, burnout, and reduced efficiency.

Furthermore, many public procurement departments don’t sufficiently value deep category expertise (particularly for less common goods and services), which means that purchasing decisions are often made without the necessary facts, data, and insights.

Fixed mindset

Public procurement departments are often heavily focused on process-driven, tactical activities (mainly sourcing) and dedicate a significant portion of their attention to compliance. This means that other crucial aspects of procurement, like category management, stakeholder engagement, and innovative problem-solving, are often neglected.

Limited tech adoption

Procurement technology adoption in the public sector is slow. Many government agencies still use outdated, manual procurement systems and processes, which often lead to inefficiencies and errors. Manual processes also make it difficult for departments to access and report on data related to contract performance, creating concerns about whether taxpayer money is being well spent and preventing data-driven decision-making.

Slow tech adoption is partially due to stringent regulatory requirements for government departments’ use of tech tools. While tech regulation is undoubtedly necessary, it did exclude government agencies from the recent surge in the use of Procurement SaaS solutions.

Duplication of efforts

A lack of coordination between government agencies, and silos within departments, often lead to the duplication of efforts, inefficiencies, and missed cost-saving opportunities. In his conversation with the Institute for Government, John Healy MP, Secretary of State for Defence, said: “We duplicate even the most central tasks. For example, we have 11 separate finance functions and 2500 people doing the same activity in different places, in different ways.”

Meanwhile, government agencies often also set up parallel contracts to the Crown Commercial Services category frameworks instead of buying their goods and services through the existing approved framework. For example, CSS is currently tendering iteration four of the Management Consultancy Framework (MCF), and yet many government agencies are still setting up their own agreements. Many departments also use non-governmental frameworks to buy consultancy services, which come with high commission fees charged by the framework provider.

Procurement Act 2023 – addressing the most pressing regulatory and market challenges

The Procurement Act 2023 aims to address some of the regulatory and market-related challenges Commercial departments face. The Bill received Royal Assent in October 2023, and the new regime will go live on 24 February 2025.

Issues the Procurement Act 2023 aims to address

Regulatory Complexity: The Procurement Act 2023 aims to simplify the legislative landscape, streamline procurement processes, and remove barriers to entry for SMEs and VCSEs. However, businesses and public bodies are still adapting to new frameworks and compliance requirements, so it’s too soon to determine whether it will be successful.
Sustainability: The Act makes it easier for government buyers to make sustainable procurement decisions. The Act empowers Commercial to consider a wide range of factors, including environmental impact, when awarding contracts and allows procurement departments to debar underperforming or unethical suppliers more easily.
Duplication: The Act introduced the Central Digital Platform (CDP), a centralised service designed to facilitate all public procurement notices and tenders. Both suppliers and contracting authorities will register on the platform, receiving unique identifiers that assist in preventing duplication of records. By centralising information and employing unique identifiers, the CDP aims to reduce the likelihood of overlapping efforts among different government departments when procuring similar goods or services.
Transparency: The Act aims to create a more open and transparent procurement regime, delivering “transparency by default” across the entire Commercial lifecycle. Changes to support this include mandating the publication of notices at additional stages of the procurement process and the introduction of the CDP.

While the introduction of the Procurement Act 2023 is a step in the right direction, its success will depend on how well it is implemented across Commerical. The act may facilitate change, but it’s up to each department to manage and drive its own transformation. Taking advantage of the new regulations will require a shift in mindset and appetite for risk; however, shying away from these new opportunities will only cement the status quo.

Mitigating key organisational challenges – advice for public procurement departments

To deal with the most pressing challenges and become more efficient, Commercial departments must focus on the following aspects:

Become more strategic

Government agencies must aim to move Commercial up the value chain towards category management. By moving towards category management, as opposed to strongly focusing on sourcing and compliance, Commercial can become more resilient in the face of market challenges. A more strategic approach can also enable procurement departments to use the government’s buying power to shape external markets and influence industrial strategy.

Sam Ulyatt, Chief Commercial Officer, UK Home Office, strongly advocates for category management to help Commercial become a directorate of strategic leaders. “My vision is that we can all sit around a virtual table, discussing and understanding market movements and delivering to a common goal. Above all, we must have a plan for whatever our government is going to be facing – no one knows what the future holds. But we do know that if we concentrate on the right strategy, tools and skillsets, we can build the stability that will gear us up for whatever ministerial priorities the future brings,” she says.

Improve organisational processes

Procurement departments should leverage the opportunities the Procurement Act 2023 offers to help them design leaner processes and take advantage of new technologies to automate costly manual, repetitive tasks. Furthermore, Commercial must create an operating model that drives efficiency through greater collaboration. Due to the scale on which most government agencies operate–the NHS, for example, has 4,000 people buying products and services from more than 80,000 suppliers–departments have to focus on skills development and change management to facilitate increased collaboration.

Build organisational capability and retain talent

To remain resilient in the face of legislative, market and organisational challenges and changes, procurement departments must focus on building organisational capability and defining clear career paths to retain top talent.

Capability building in this context encompasses both a mindset shift and skills development. Commercial must incentivise and drive employees to focus more on stakeholder engagement, collaboration, and innovation. They should also ensure their staff receive the necessary training to use digital tools effectively and have opportunities to develop their procurement expertise (becoming experts in what they buy and how they buy it).

Build a resilient procurement function

Public procurement faces various challenges that can feel stifling. However, by developing an operating model that balances organisational, process, talent, and technology requirements, procurement departments can improve their effectiveness, efficiency, and resilience. Ensuring procurement departments act coherently and have deep category expertise to operate efficiently and effectively is the best way to enhance value for taxpayers and stakeholders.

Contact us to discuss your specific challenges and learn how we helped other public sector agencies identify and execute areas for improvement.

Future Purchasing

If you want to get more value out of your procurement spend, or you just want to know more about us, request a callback above or send us an email and we will come straight back to you.

Contact Future Purchasing

Next Phase of AI & Digital Category Management

By Mark Hubbard | February 11, 2025

The rapid growth of Artificial Intelligence as a core subject in many areas of life and the incorporation of the phrase ‘AI’ into a range of products and services is a reality. At this stage, deciding how and where to embrace AI in Procurement is the challenge many centres of excellence face.

A lot of current focus is on AI tools that leverage Large Language Models and use text driven interfaces and queries – Chat GPT started the craze and is probably the most prominent one, but others like Meta’s Llama, Google’s Gemini and Microsoft’s Copilot are catching up with speed. However, there are also AI based tools which focus more on image manipulation, decision support, numerical analysis and behavioural predictions. It is far from a one solution fits all position, and understanding the marketplace for AI support, and how that fits against our individual requirements, is key at this stage.

Clearly, there is a potent argument for developing a category strategy for AI support in procurement, as all the key stages in category management immediately apply to understanding what we want and need.

Articulating business requirements for AI

The 2024 Category Management Report shows that category knowledge, skills in the application of category management, and stakeholder management are all critical to effectively deliver value. Finding an AI solution in these spaces would address many of the challenges we currently have. However, these are three distinct requirements, so we need to get more granular about exactly what we need to solve here, for our own organisation.

We are likely to have data security business requirements, as well as cost of service provision. As this is an evolving technology, we are likely to have requirements around evolution of service and how to protect ourselves from that. Our largest challenge and requirement is how to integrate the approach into our overall delivery, and how to train our people to use the tools effectively.

From this we will have our own blend of requirements for AI, and, if we do it well, a balanced scorecard of those requirements showing importance and ranking.

Next Phase AI & Digital Category Management

Data analytics: bridging the gap

As we outlined in our article on Data-Driven Procurement, we are often rich in data but poor in knowledge. Using AI supported analytical tools is a sensible step as LLM AI tools are already good at pulling market overviews together or cleansing and harmonising data. But getting to an analysis of spend or understanding supply chain value quickly continues to require human intervention and validation. High quality analytics which drive insights and initiatives in an understandable way is the goal and AI tools for accelerated category strategy development are starting to help with this.

Decision support: unleashing AI’s potential

One of the poorly understood challenges of category management is the decision-making process around which option, or combination of initiatives, is most likely to deliver value to the organisation. This is often a manual process and influenced by recency, familiarity, history, and data-free opinions. At a simple level, a decision tree with value attribution can help. However, a better solution is an AI-driven decision engine that suggests the most effective combination of business requirement inputs and available value levers to recommend relevant initiatives.

In a perfect world, getting to the right combination includes the implementation approach and required resources to reflect the reality that outcomes are often blunted by the limited ability to deliver change.
The general approach here is the use of Intelligent Decision Support Systems, which typically use Natural Language Processing approaches to integrate broad data sets and use AI decision support software to guide the decision-making process.

Governance and overview: navigating complexity

Many category management programs falter as activities stall, both in strategy development and within implementation. AI can support in keeping track of the wide range of teams, activities and initiatives that all need to move together and intertwine. Being able to analyse the content of these interactions can help identify intervention needs before projects become unrecoverable. Resource management and reporting is something AI can contribute to as humans tend to be less diligent with mundane tasks.

Conclusions

AI isn’t a one-size-fits-all solution and use cases will continue to emerge. We really need to focus on what we need to achieve and test the most promising solutions. We also need to ensure that we allow for flexibility, experimentation, and fast failure. Building a category strategy to identify and deliver the best AI solution is the way to go here; although we may have to do that without AI help at the start.

Further reading:

Blog: An AI Driven Approach That Dramatically Accelerates Category Strategies delivery

About Mark Hubbard

Director

Contact Mark Hubbard

Category management – 2024 Key topic at SAP Spend Connect Live event in Las Vegas

By Mark Webb | October 30, 2024

A couple of weeks back I had the great pleasure of joining our friends at the SAP Spend Connect Live event in Las Vegas. It was great to see category management being consistently raised as a key topic by the keynote speakers. This reflects the emphasis that SAP is placing on their relatively new product in this space. It was clear from the sessions that I attended how much emphasis and investment is being made in the product and that there are significant developments in the pipeline – including CPO dashboard, GenAI recommended strategic options, and AI co-Pilot feature. The presentation by Ram Gopalakrishnan, the CatMan solution lead (including the development roadmap) is available here and the SAP Ariba CatMan solution homepage is here.

Category management – 2024 Key topic at SAP Spend Connect Live event in Las Vegas

A clear takeaway for me was the potential for AI to help category managers accelerate the development of actionable insights and value opportunities. In the short term, these are not going to be perfect and will require validation from category experts. However, AI can empower less experienced category managers to achieve meaningful results more quickly and with reduced oversight. Allowing AI tools to access external category knowledge, as well as curated content is going to be an interesting development that will test corporate procurement departments and their security colleagues as they balance accessibility with data protection and compliance requirements in the coming years.

In the ‘fireside chat’ that Ram and I had we discussed some of the practices used by leading organisations to embed category management:

Adopting a strategic approach above category management to coordinate activities, categories, and suppliers. This was raised by a number of attendees who recognised that category management drives value at a category level but does not deal with x-category challenges or create a pipeline of category and supplier projects. More information on strategic alignment can be found here.
Ensuring category strategies are created at the right level in a taxonomy. Here we discussed how leaders recognise that strategies should not be created at too high a level in the taxonomy, as we then start to have multiple sets of business requirements, supply markets etc. It results in more strategies being created, but they each are more specific and identify specific value lever opportunities.
Setting standards. As obviousas it may seem, our research shows that only leading organisations have defined standards for what a good strategy looks like and hold reviews with PLT members and senior business stakeholders.
Sourcing activity separated from strategy creation. One of the advantages of the SAP CatMan solution is the integration with spend control tower and sourcing – what they are calling the ‘triple crown’. This may help others to follow in the footsteps of leading organisations, where 80% in our latest survey have separate teams doing strategy creation and sourcing.
Strategies are continually updated. In the past strategy creation tended to be a 3-year cycle of heavy lift activity and the attendees had similar experiences. Technology now facilitates more frequent strategy updates and bite size working. Leaders are seeing their strategies as live and continually evolving. This is a major shift for most organisations and will require some change management to maximise the opportunity from this shift.

At an engaging ExxonMobil session, they presented their category management journey with SAP and shared a number of familiar improvement opportunities that they were looking to strengthen by digitising their approach to managing $55bn spend:

Making strategy content and formats more consistent
Creating category strategies at the right level in the taxonomy
Encouraging category manager to start building strategies earlier
Allocating more category manager time allocation onto strategic thinking

A rounded change management approach was being adopted to ensure the new way of working landed well with the team, alongside an expectation of ongoing functionality improvements from SAP.

Our aim is to continue to work with SAP, and other digital solution providers, to help to develop the effectiveness and efficiency of our clients’ Procurement teams. to be very clear about the outcomes we are trying to achieve, to make sure we are clearly building in that direction.

About Mark Webb

Managing Director

30+ years procurement experience in line management
and consulting roles.
Previous employment: Price Waterhouse, Mobil Oil and QP Group
Education: BSc in Management Science and MSc in Business by Research, Aston University
CIPS: Member

Contact Mark Webb

Category Management: How Far We’ve Come, How Far We Can Go

By Future Purchasing | July 14, 2024

“I think category management is great fun because you have the freedom to do things. It’s not following a rote process. It’s using structure to be creative. I think that’s the great benefit of it.” – Mark Webb, Managing Director at Future Purchasing

Art of Procurement interview with Mark Webb — Listen to Category Management: How Far We’ve Come, How Far We Can Go here >

There’s a widespread assumption among many in procurement that category management, which has been established as a discipline in its own right for over 40 years, is a widely adopted, well understood strategic aspect of procurement that is now just ‘old hat.’

While true for some teams, that misconception ignores the more underdeveloped aspects of category management’s maturity level, missing potential value-creating opportunities for procurement to improve upon some of the gaps, miscommunications, and key performance indicators.

Recently, I welcomed Mark Webb, Managing Director at Future Purchasing, back to the podcast to discuss some of the current challenges and opportunities within category management, using their newly published 2024 Global Category Management Report as a basis for the conversation.

Mark shared some of the more notable insights from the report, including the fact that a whopping 86 percent of stakeholders don’t understand their role in category management, as well as best practices for how category managers can adapt and mature their operating models to deliver more value – and improve communication about that value across the business.

I wanted to capture some of Mark’s most valuable takeaways from our conversation. Here is Mark, in his own words, on the current and future states of category management:

What category management is, and isn’t

“For us, it is that connection between the supply market and the internal requirements and the strategic objectives of the organization, and finding a way to transform the value that you get from the procurement spend.

It’s a much more collaborative approach. It’s one where the technical side from the business and the commercial procurement team are working hand-in-hand. That’s different from strategic sourcing which tends to be a bit more output-orientated around running a sourcing event.”

Who is getting category management right?

“When we do the global category management reports, we always find about five to seven percent of people are really excellent. They are the leaders out there. But, there is a big chunk of respondents that are just getting started.

Then, there is a 20 percent group in-between who are the ‘improvers.’ There are big organizations in that ‘improver’ space as well. We have a lot more to do for these ‘starter’ and ‘improver’ groups, and I think digital will give it a bit of a boost now that digital category management is making more inroads.”

Trends in the digitization of category management

“The technology isn’t where it could be and where it will be, and the use of AI is somewhat overplayed because some of it is more to me like formalizing a decision and more decision-based. But AI will become more prevalent with some of the data that is available.

Of course, that means refreshing your strategy with real experience, and that is really hard to do because security and independent perspectives of that data belong to a particular organization.”

Avoid the ‘silo’ trap in category management

“There’s a temptation with some of these tools to use them in a silo, and there is almost a parallel track where all of the creativity that you get from working with business stakeholders shouldn’t be lost at the same time.

Category managers need to use their tools in parallel with engaging people in the same way that we would have done through workshops and getting those engineers, marketing people, or scientists on the business side to give you their ideas. Then it becomes a joint strategy that everybody buys into. By doing this, it gets implemented much faster.”

What defines a good category management strategy?

“Go through strategies and come up with a checklist using some lean principles about definitions, like what does good look like? Make it very specific for each of the key tools that we would see within the strategy. That is something that people can do. It doesn’t take particularly long. …

The really big thing for us is having callouts in every area where we say, ‘What are the conclusions? What are the insights that you’ve developed from doing this piece of analysis?’ People are quite good at filling out templates, but it’s the insights and the takeaways where you want to spend the most attention.”

Making meaning out of category insights

“Don’t be afraid to roll up your sleeves and get into the dirt. You can’t get it really to every level of detail you want – initially maybe, if you are in a big global organization. Ask yourself how you are spending that money. What is the cost model that you put from one location to another? You are starting to see insights.

When you see category managers thinking like that and they know what the levers are and they are really digging into it, that is a great strategy because that is not particularly strategic all the time, but it is knowing that you are hovering that up and down all the time, going very high level, but also not being afraid to drop down and start to do some detailed analysis.”

Future Purchasing

If you want to get more value out of your procurement spend, or you just want to know more about us, request a callback above or send us an email and we will come straight back to you.

Contact Future Purchasing

Category Management starts and ends with the business priorities for Nordea

By Future Purchasing | April 30, 2024

Morton Hedegaard - Head of Group Procurement, Nordea

Morten Hedegaard
Head of Group Procurement, Nordea

Nordea is a global bank with a 200-year history of supporting and growing the Nordic economies. Their values are deeply rooted in these open, progressive and collaborative societies. They are the largest bank in the Nordics and have a strong market position within their four business areas: Personal Banking, Business Banking, Large Corporates & Institutions and Asset & Wealth Management.

Mindful of their responsibility towards current and future generations, they have made sustainability an integrated part of our business strategy. They enable sustainable choices for their customers, engage in active ownership and drive change through their lending and investment decisions.

Many key components must fall into place to make category management a business success factor. But an overriding tenet that has frequently shown to be at its core is a solid understanding of the business priorities to be an effectful business partner.

In a successful operation, the procurement team, but especially its sourcing and category managers, must understand the strategies, goals and processes of the business functions with which they work and tailor their own strategies and processes to support their projects. This requires frequent stakeholder communication at all levels, resulting in a combination of both technical and commercial skills to access the business’s potential value levers.

This is a principle long held by the Head of Group Procurement at Nordea Bank Abp, Morten Hedegaard. With 13 years’ experience at the prominent Nordic financial services group, Morten has successfully run a cross-functionally operating procurement department since 2018, and previously held roles in operations, category management, project management and consultancy.

Morten shares his experiences and learnings from what he describes as the department’s “ongoing category management journey.”

Category Management starts and ends with the business priorities

An embedded approach is a partnership approach

Having begun its category management journey some years back, the procurement team at Nordea has arrived at a stage where they have ceased to refer to category management as a separate discipline, such is the extent of its embedment. Rather, the conversation today leans towards Partnership.

“A business partner,” Morten says, “is someone who can lead and drive business outcomes for the stakeholder. This goes deeper than just supporting them, and for us it is borne out of time invested in engaging, listening, understanding and applying relevant expertise that allows us to challenge – something that adds value to agreements rather than simply executing them.”

To arrive at this point, they went from a text-book style model of separate category management teams (for indirect or banking-specific categories for example) to a single team which now embraces a partnership approach. “We found that time spent on routine category management exercises like a certain schedule of category plans, market analysis, spend analysis, contract landscape analysis and industry trends, while important for us, yielded technical input from the stakeholders, but not the strategic input to projects we wanted.”

A structural change was needed. While the current tactical approach facilitated an entry point to a pipeline of projects, a new partnership approach would help them obtain their financial KPIs. That would rely on a build-up of credibility. And to gain that credibility they needed to get to know the business functions’ priorities, the question was …

How to engage with the business and its budget holders?

Getting to understand the agenda and the mechanics of a business area comes from working in projects rather than holding status meetings.

“Once you are able to be part of large projects, it follows that you build relationships. And once you are able to demonstrate your expertise and knowledge (which is where your traditional category management analyses come into play) then you will gain the trust to work side-by-side with the stakeholders. The ‘big ticket’ contracts need sourcing and negotiating skills to be completed, and close advisors to help execute them. That’s where our value is added.”

“This doesn’t mean that we are not following a category management approach, on the contrary, we are taking the relevant components of Category Management and applying them where it makes most sense and not least when it makes sense to do so in a financial services environment. When a window of opportunity arises, which might be anything from business process outsourcing to the use of a new technology, we are ready to have all hands-on deck. Then we will take a SWAT team approach to ensure success for the business area.”

A classic approach to category management might be more relevant to the production industry for example, where raw materials or components are being sourced and whose prices are market-dependent and where there’s a supply chain to manage. But the financial services sector doesn’t always fit into a tangible mould. “We are buying services that are integrated into business processes. So, you have to be able to adapt the category management concepts to suit your business or service.”

“You get the stakeholder buy-in by proving that you can add value. When you have proved yourself you don’t need a mandate. To earn a seat at the table, for us, is to be involved in the large, complex sourcing projects where we can use our negotiation and advisory skills and thus gain stakeholder respect. The key stakeholder is more likely to want to interact with the sourcing manager who has been involved in the whole negotiation and understands the specified requirements. So in our model, sourcing and category management must go hand in hand to add value.”

So the procurement team has developed a very agile approach which enables them to respond to any window of opportunity. Says Morten: “Sometimes a category strategy is what is required to advance a specific area, but it then requires full attention from me and my management team to create the buy-in from senior leadership in the business areas. And sometimes there is little appetite in the business areas to make changes to the supplier base, because their focus is elsewhere.”

“In our environment it is not a necessity to have deep expertise in every possible category at all times. But having this agile approach, with pockets of expertise and a team that deep dives into the businesses, works for us and helps us achieve credibility with stakeholders.”

What do the stakeholders perceive as value?

Value can mean different things to different people and departments, but according to Morten:

“Firstly there’s a big value add in bringing a mature sourcing approach to the table, which will yield a better commercial output. This means the structure and methods to do the relevant analysis, sourcing strategies, and not least negotiation. This is where we have the ability to lead because it’s a professionalism not usually in abundance in the business areas.”

“Secondly, the regulatory landscape has become top of mind for everyone in the industry, so there’s a bigger need for the business to involve us in the jungle that is risk and compliance. When we have been involved, stakeholders can rely on the fact that all relevant risk and compliance requirements have been met. Risk management is a special skill set, and we have to internalise and have a deep understanding of the risk that we have to manage to be able to navigate all requirements smoothly.”

“Thirdly, long-term strategic planning for opportunity identification and capacity optimisation is valued. The cadence for these discussions is typically quarterly and we run a 12- to 18-month rolling pipeline. This means we have all strategic discussions within one team, which learns the business’s priorities and is separate from the operational side. This way we keep on top of things like expiring agreements or renegotiations so that we can plan for them in advance.”

At the end of the day …

The core of procurement is to enable the best business outcomes by matching the business requirements with the best the supplier market can offer. “But, at the end of the day,” concludes Morten, “what really matters is that we communicate regularly with the business to understand their requirements and add the value that they cannot.”

As this survey reveals, procurement teams that have embedded a cross-functional way of working with budget holders and technical stakeholders (the ‘Leaders’) are those whose relationships have evolved to consider business objectives and category targets a joint responsibility.

This case study is taken from

“Influence the Future” – The 2024 Global Category Management Report

Equip yourself with the knowledge and tools needed for tomorrow’s challenges.

Strategic Focus: Gain insights into top practices that drive improvements.
Value Delivery: See how leaders maximise value beyond expectations.
Team Efficiency: Deliver twice the value, with half the resources.
Industry Benchmarking: Assess how you measure up to industry standards.
Expert Knowledge: Extract actionable advice from leading global case studies.

Related Expertise

Supplier management

Our supplier management approach combines excellent tools and techniques across the full range of activity, from segmentation, through performance measurement and improvement and through to relationship strategy development.

Find out more

Category management

Excellence in Category Management gives multipliers of value delivery compared to less effective programs. Our approach, delivers a high performing team and process which provides sustainable value over years rather than months.

Find out more

negotiating for procurement

Our approach to procurement negotiation helps teams to improve performance, track their progress, measure success and secure rapid payback to programme costs. It is based on four principles…

Find out more

Future Purchasing

If you want to get more value out of your procurement spend, or you just want to know more about us, request a callback above or send us an email and we will come straight back to you.

Contact Future Purchasing

Talent and strategy make for successful category management at ExxonMobil

By Future Purchasing | April 30, 2024

Pamela Kearney Skaufel
VP Global Procurement, ExxonMobil

ExxonMobil, one of the largest oil, gas, integrated fuels, lubricants, chemicals and lower-emissions technologies companies in the world, has been undergoing a significant business transformation over the past two to three years and that has included the adoption and refinement of a critical area for procurement teams: category management.

The elements that make up a good category management approach that will yield opportunities to unlock savings and deliver wider value to the business include strategy, structure, collaboration and talent, all of which the Commercial organisation has embraced to the full.

For a global and complex organisation like ExxonMobil, category management, done well, can help steer the business towards its future ambitions. What makes this organisation complex and unique in its implementation of category excellence is the sheer size of spend, teams and structure. Of about 2000 people, 700 work in the category space — a high number, but not surprising considering the organisation’s $49 billion in spend on both directs and indirects. How they structure that is key.

Pamela Kearney Skaufel, VP Global Procurement, explains that “the spend is divided into seven major category families, small enough that you can get your arms around them, but big enough that you can use scale to your advantage. We are highly centralised in terms of how we execute our procurements, but we are complex because of our global footprint. For instance, we cover oil and gas, refining and chemicals operations around the world, including the production of lubricant products, like our Mobil1 flagship brand. We also support development of large facilities, like hydrogen processing plants for our Low Carbon Solutions Business and the biggest advanced recycling plant in the US. So, the size and variety of businesses for which we procure makes us a very powerful buyer.”

Strategic category management is a way of thinking

Category management is a primary channel to leverage that buying power. “For us,” Pamela explains, “it encompasses more than sourcing; we see sourcing as a series of events that come from category management. Category management is the larger, more strategic approach to how we think about the entire range of goods and services in a category. It’s ultimately about how we think across the whole organisation in terms of supplier relationships, payment terms, how many suppliers we need, etc. So, we see the category structure through various lenses, led by category managers who report into category families. While it is the contract leads globally who are executing on behalf of the categories, it is the category managers who are responsible for strategy, approach and how we go to market.”

“What’s important in our approach,” adds George McGlamery, Commercial Chief, “is that we consider these category manager positions as leadership roles, so they have global responsibilities and input on various go-to-market strategies, like IT or wells services, which helps us quickly implement a more complete set of commercial levers no matter the operating site. Thus the category managers can be working across all geographies, with operations in about 60 or 70 countries.”

Visibility breeds credibility

One of the deliverables of the transformation programme was to provide absolute clarity on the requirements of the category families versus the contract leads. “This is important,” says Pamela, “because without clearly defined roles and accountabilities upfront, you can end up with country-level activities that aren’t aligned with the overall business strategy, leading to less control.

“A strategy is not something that lives in your head or on your C drive, it’s something very comprehensive, with minimum requirements. So this ‘clarity’ includes understanding where strategies need to be created, how often they are refreshed, how they map to business requirements, and so on. Then we have a set of subject matter experts in place, like senior technical professionals, who peer review the category strategies and score them to make sure they meet the absolute minimum criteria for what good looks like. And this level of professionalism is hugely impactful.”

What good looks like was directed by the category management system they put in place. Using CAPS (Center for Advanced Procurement Studies in North America) they went “back to basics” and used their learnings to identify a systematic process which defines what they expect from end-to-end Category Management.

“People found it a really useful tool since it helped them better understand what our expectations were, like what makes a good category strategy and what are the outputs expected from it,” Pamela explains. “It meant the higher expectations placed on them, in terms of cost-reduction or cost-avoidance targets, were made clear from the Category Management System. Applying that to execute supplier and contract analysis, market analysis or should-cost modelling, gives them insights for better outcomes. So when you give someone lofty goals, but you also give them guidance upstream on how to achieve them, then that galvanises support.”

“And through formalisation,” explains George, “we get deeper visibility of everything we leverage. At the end of the day we are a solutions business, so credibility is hugely important to us. The more transparent we are, the more our stakeholders can see how we work, the more credibility we have, and the more they trust us to operate independently. Further, formalising what we do, not only helps them understand our business, but enables them to contribute to it, giving us a full solution.”

Leadership and role model concept, 3d rendering

Talent is an important element of the strategy

“In a commodity business like ours,” says Pamela, “we have to make sure we get the best prices so we can be successful in a very competitive marketplace. And I think people see our category approach as a way to unlock that, but it requires talent.”

The skills required of a Category Manager are very different from those of a Contract Lead. Pamela believes that if you give people the tools needed to self-assess and tell them where they are in their journey, and provide them with the training they need, you can discover who is best suited to strategy and who is best suited to lead roles. “But whichever that is,” she emphasises, “the more tactical roles are just as valuable as the strategic ones. Our aim is to help people understand the importance of having the right mix of talent and that skills can be transferred from one category to another.”

Segmenting the biggest deals and then pairing developing staff with more experienced mentors to carry out these major negotiations helps instil commercial principles, build commercial skills and improve confidence, better enabling the movement of talent from one deal to another, regardless of category. “And we can build that collective competency across the entire category board,” says Pamela. “The process of moving talent to your biggest and highest priorities is a really good output of our strategy; it means we are ready to mobilise resource from across the categories to where they are most needed.”

Cross-organisational alignment

Of course, it’s important that any transformation aligns with what the organisation wants to do, and you have to be able to show the business that category management is delivering value.

Being an Enterprise Process Owner during the business’ own transformation has given Pamela an opportunity to communicate outcomes and to be part of decisions on go-to-market strategies and projects. But with authority comes the responsibility to implement those decisions. Again, you need the right people and talent for that.

To improve the talent pool, Pamela introduced skills self-assessment and has senior leaders validate those skills and create a training roadmap. They also provide procurement-specific training (on negotiations, on setting up contract terms, on influencing, etc.) to upskill everyone.

“We are quickly heading in a direction where we can share resources with other commercial functions as people’s depth of understanding grows, so we can carry out commercial work all over the corporation. In Sales, for example, the experience and skills needed for business development activities are very similar to ours. Likewise, a lot of the experience acquired in the sales environment is very transferrable to purchasing. Deep knowledge gained by marketing and selling chemical products for example is very transferrable to the category side.

What it takes to make category management successful

What it takes to make category management successful According to Pamela, to make category management successful you have to really believe in what you are trying to do. “You can’t achieve what’s possible by limiting yourself,” Pamela says. “You have to believe in setting big targets, like working across the organisation. We originally thought would be too hard, because ExxonMobil was traditionally very siloed with lots of different companies. But now that we know we can deliver good things for the company, we are able to believe in our capabilities.”

On the more tactical side, Pamela is passionate about data and systems. “You need good data for everything,” she says. “For example, we have nine different instances of our ERP system and pulling data from multiple different systems is always hard. So the data transformation project that we have under way right now, replacing our business systems and ultimately modernising our processes, is going to be a huge enabler for our future.”

Digitalisation will only increase the impact of category management

While the spend management technology providers are developing their product suites of the future with category management workflow in mind, teams like Pamela’s can help frame their offerings by advising on the needs of the industry. “What we want is to be able to connect everything from spend tools, category insights, contracting levers and all kinds of KPIs into a full end-to-end category management approach that you can only do well if you have a system in place that formalises it, gives you insights you can pull directly out of the system and eliminates all the manual labour we use today.

“If you’re going to start using the power of technology, it’s got to come through a platform using machine learning to quickly get to what you want, and then using AI to get to market even faster. But there’s no point going to market without the right insights or data in the first place. And one of the big use cases I see for AI in category management is the ability to ask the chatbot, or whichever form the LLM takes, to give you details on your goods and services spend over a certain amount of time, including out of contract, and prepare a set of commercial levers based on those insights. If you ask the machine all the right questions, you can map the answers with your category strategy, and that will make the buyer of the future incredibly powerful.”

This case study is taken from

“Influence the Future” – The 2024 Global Category Management Report

Equip yourself with the knowledge and tools needed for tomorrow’s challenges.

Strategic Focus: Gain insights into top practices that drive improvements.
Value Delivery: See how leaders maximise value beyond expectations.
Team Efficiency: Deliver twice the value, with half the resources.
Industry Benchmarking: Assess how you measure up to industry standards.
Expert Knowledge: Extract actionable advice from leading global case studies.

Related Expertise

Supplier management

Find out more

Category management

Find out more

negotiating for procurement

Our approach to procurement negotiation helps teams to improve performance, track their progress, measure success and secure rapid payback to programme costs. It is based on four principles…

Find out more

Future Purchasing

If you want to get more value out of your procurement spend, or you just want to know more about us, request a callback above or send us an email and we will come straight back to you.

Contact Future Purchasing

Home Office – Using category management to position Commercial as a strategic leader

By Future Purchasing | April 30, 2024

Sam Ulyatt
Chief Commercial Officer, UK Home Office

With an annual UK public sector spend of £6.4 billion, The Home Office has a responsibility to manage public money and resources using best business practices. The standards expected are demanding.

Sam Ulyatt, its Chief Commercial Officer, explains why she believes a category management approach is essential to deliver to those standards.

“At present,” Sam says, “each Director General has responsibility for a budget or part thereof, which means spending can be carried out in isolation, and that means that various budget holders could be going to market for the same product or service at very similar times, but with very different prices. So, my vision for the Department is twofold:

Firstly, I’d like to join up how we use that spend, how we present ourselves to market, how we all understand our categories and the impact they have on the marketplace, and on ourselves.
Secondly, I’d like to instil a culture, mindset and way of working that complements and supports the government’s commercial drivers and outcomes.”

“And my ultimate desire would be to do this across all of government.”

Where category management fits in

Sam is aware of what needs to change in order for Commercial to be positioned as a directorate of strategic leaders – a transition is required to effect the vision. “With this amount of annual spend,” she says, “we need to, and should, have a much louder voice around the table. We aim to achieve that by looking strategically at how our operations are carried out, including those by contractors, and working more closely and strategically with our suppliers and the businesses to help shape their strategies. Category management is a big part of that agenda.”

At the very heart of this, for Sam, is both the capacity and the capability of the people doing their jobs, and of the procurement profession generally. “My observations over the years are that many people spend their time operating the mechanics of procurement, being transactional, and my aim is to get that time and resource back by operating more efficiently – by employing category management. I believe a category management approach will massively drive benefits for the business and for the people within it.”

While a commercial team by nature has lots of expertise in procurement regulation and legislation, it’s essential for them to understand their markets just as well. And a conjoined approach alongside technology, Sam believes, can help them to be more streamlined, quicker, and to think more strategically.

“I think the implementation of category management is really a natural progression towards this vision – it’s not new, it’s something that’s been around for a very long time.”

As a leader, Sam can see ahead to what ‘good looks like.’ She’s seen the movie before. She successfully implemented category management at Crown Commercial Service, and is now busy getting her team on board to do the same.

Getting over the fear-of-the-unknown hurdle

“Naturally, there’s a lot of frightened people,” Sam explains, “because being strategic means leaving the comfort zone of how we’ve always done things. So we need to lead a cultural change in the way we engage with our markets, and we will be automating a significant amount of what we do. But that doesn’t mean less people – a myth that must be dispelled – it means people with augmented skill sets.

“Yet this is where we encounter some resistance, not just in the commercial teams, but in the business teams as well, because it means change. The change is not just about the principles of category management, it’s about people too.

“How we conquer the fear element is a million-dollar question. And it revolves around time and readiness. We need to support and enable people on this journey and work alongside them, as with all change, this can bring positive and negative thoughts.”

How do you achieve readiness?

“A leader needs to have earned respect and trust,” Sam says. “You cannot come into a change management role with a list of to-do’s and demands. That results in chaos.

“You must be aware that people fear change, even if they won’t articulate it – they show it in their resistance. But they will follow you if they believe it is the right thing to do – the right direction. And it’s the leader’s job to communicate that, to help them understand that in fact strategic thinking about how you are going to deliver something, and avoid any problems along the way, is more productive than the transactional box checking and button pressing. A non-strategic approach is massively costly and doesn’t reap the benefits we could be getting from our suppliers.

“On that point – also educating some of the supplies on the benefits of strategic working is another hurdle … but that’s another story.
“The other challenge is getting all of the leaders in that space. How you gain their trust is through stability and consistency in your messaging. You need to stay firm that this is not a passing change but a need to continually improve. The key is, you take everyone along with you. It’s important to listen to concerns, but also to deal with them, move on and get to a stage where you are ready for your CatMan journey.” So you need resilient leaders among your ambassadors, and a strong collective leadership message.

And this is where training comes in …

“It does take a lot of coaching,” says Sam. “We are ‘on the change curve’ at the moment, so it’s not going to be easy. Changing the hearts and minds of people is hard, so stakeholder management is important. If change management is a degree-level skill in the private sector, it’s a Ph.D. in the public sector. It takes perseverance, it takes resilience, and it takes training. And I think where other attempts at CatMan have failed, it’s because they haven’t put enough focus on those points.”

The CatMan structure and organisation

How Sam intends to organise the CatMan approach is another big part of the ‘readiness’ equation. “We have a portfolio of big projects,” Sam explains. “Some impact external spend, so you could categorise them horizontally across all programmes.

“The way we are structured at the moment is with a DDaT, commercial and operations director, and I will soon be hiring a strategic category director too. That shows the seriousness of our intentions. It’s a really important leadership role because that person will be the change catalyst. And because, for example, about 45% of spend is on DDaT, I’m going to have a business partner in our strategic category team who will deal with that business and own it end to end, including the customer part. And it’s my job to make sure that person is a true business partner who will own business problems and keep them until they are solved.”

Sam aims to turn the Target Operating Model completely on its head, and actually change that role. “So we’ll have people with strategic categories, the specialists, for example in professional services. And operationally there will be the business partner team as the front door. But the engine behind all of that will be strategic category management.

“I see the strategic team being focused on strategy and the operational team underneath connecting well in the delivery of non-category spend alongside contract management. And we are working on a strategic category view. Lessons learned from doing this previously tell me that you have to keep a strong grip on the category and drive it – it doesn’t just happen. You have to turn it into best practice then mirror that across categories. But the two must stay linked.

“My big question at the moment is: do we have dedicated people or do we have a pool of specialists that work horizontally? Whichever, you need a workforce management process to allow that, to move away from only controlling what’s in your direct line – another shift that must be managed.

“What our structure will look like is still in the making, but it will happen, and across categories there will be holistic buying with category management touching every part of it.”

Ultimately, what does good look like?

For Sam, category management will bring not just a commercial, but a multi-disciplinary skill set. “My vision is that we can all sit around a virtual table, discussing and understanding market movements and delivering to a common goal. So that is what good typically looks like to me.

“It will require project management to bring everyone on board, and fortunately within The Home Office we do have that skill, and we have the right people to help drive this, where category strategies can align with delivering wider goals. For example, we have a two-year rolling plan that leads to a 2030 vision for Commercial and how category management fits within that.

“Above all, we must have a plan for whatever our government is going to be facing – no one knows what the future holds. But we do know that if we concentrate on the right strategy, tools and skillsets we can build the stability that will gear us up for whatever ministerial priorities the future brings.”

This case study is taken from

“Influence the Future” – The 2024 Global Category Management Report

Equip yourself with the knowledge and tools needed for tomorrow’s challenges.

Strategic Focus: Gain insights into top practices that drive improvements.
Value Delivery: See how leaders maximise value beyond expectations.
Team Efficiency: Deliver twice the value, with half the resources.
Industry Benchmarking: Assess how you measure up to industry standards.
Expert Knowledge: Extract actionable advice from leading global case studies.

Future Purchasing

If you want to get more value out of your procurement spend, or you just want to know more about us, request a callback above or send us an email and we will come straight back to you.

Contact Future Purchasing

We have been utilising an AI-driven approach that dramatically accelerates category strategies’ delivery with some of our most progressive clients.

The system and supporting approaches provide:

The integrated approach: Procurement, AI, and Expert Coaching

How does this work?

About Mark Hubbard

Further Reading

What should be in a category management strategy?

A Meeting of Minds Webinar

At AstraZeneca the foundations of category management are built on stakeholder engagement

From our research, it is clear that many organisations still see category management as simply another term for strategic sourcing. However, we believe that category management and strategic sourcing focus on different aspects and have distinct goals.

What is category management in procurement

What is strategic sourcing

Category management vs. strategic sourcing – subtle differences, big implications

While many steps and processes are similar across Category Management and Strategic Sourcing, there are some subtle differences that with significant implications on how both are applied.

Combining Category Management and Strategic Sourcing to execute strategies for increased value

About Mark Hubbard

Further Reading

What should be in a category management strategy?

At AstraZeneca the foundations of category management are built on stakeholder engagement

A Meeting of Minds Webinar

Maturity assessments have a bad name. While leadership teams search for ways to increase resource efficiencies and effectiveness, many organisations lack the structured approach to review their processes and identify areas for improvement.

The performance of your procurement organisation is relative

Procurement thinks it is better than the numbers say it is

External benchmarks are a powerful tool for assessing the maturity of organisations and processes

If done right, benchmarking can help you

Insights without actions are useless

Don’t do this alone

The Path to Category Management Excellence

Step-by-step guide to performing the Maturity Assessment

1 Planning

2 Current Performance Assessment

3 Maturity Benchmarking and Workshop

Your performance will be benchmarked across 60+ KPIs

4 Maturity Report and Roadmap

Transformation is an action word, not something that happens to you

Future Purchasing

Further Reading

What should be in a category management strategy?

A Meeting of Minds Webinar

At AstraZeneca the foundations of category management are built on stakeholder engagement

Public procurement departments are navigating a complex landscape of challenges, including regulatory shifts, inefficiencies, difficulty building resilient supply chains, and an increasing demand for sustainability and transparency.

Public Procurement Challenges in 2025

Regulatory Challenges

Complex regulatory environment and excessive bureaucracy

Market Challenges

Market volatility and inflation

Sustainable sourcing

Organisational Challenges

Skills shortages

Fixed mindset

Limited tech adoption

Duplication of efforts

Procurement Act 2023 – addressing the most pressing regulatory and market challenges

Issues the Procurement Act 2023 aims to address

Mitigating key organisational challenges – advice for public procurement departments

Become more strategic

Improve organisational processes

Build organisational capability and retain talent

Build a resilient procurement function

Future Purchasing

Further Reading

What should be in a category management strategy?

At AstraZeneca the foundations of category management are built on stakeholder engagement

A Meeting of Minds Webinar

The rapid growth of Artificial Intelligence as a core subject in many areas of life and the incorporation of the phrase ‘AI’ into a range of products and services is a reality. At this stage, deciding how and where to embrace AI in Procurement is the challenge many centres of excellence face.

Articulating business requirements for AI

Data analytics: bridging the gap

Decision support: unleashing AI’s potential

Governance and overview: navigating complexity

Conclusions

About Mark Hubbard

Further Reading

What should be in a category management strategy?

At AstraZeneca the foundations of category management are built on stakeholder engagement

A Meeting of Minds Webinar

Further reading:

About Mark Webb

Further Reading

A Meeting of Minds Webinar

At AstraZeneca the foundations of category management are built on stakeholder engagement

Morten Hedegaard
Head of Group Procurement, Nordea

Pamela Kearney Skaufel
VP Global Procurement, ExxonMobil

Sam Ulyatt
Chief Commercial Officer, UK Home Office