Starting point
A European industrial group sought to raise procurement performance while clarifying functional requirements for an upcoming ERP transformation. The organization had grown in a decentralized way, with different roles, processes and steering logics across entities.
A substantial share of capacity was absorbed by transactional work. European category ownership, consistent governance and robust performance indicators were missing. A large part of external spend was not covered by consistent framework or long-term agreements.
The task was not to draw another organization chart. The target model had to combine economic opportunity, local requirements, available capabilities and the timing of the ERP programme.
Mandate
OSP first developed a fact-based feasibility and then the blueprint for a European procurement target operating model.
- Analyse spend, contract coverage, organization and FTE allocation
- Assess functional maturity
- Develop the organization and governance target state
- Define roles, RACI and category ownership
- Design the source-to-pay process architecture
- Build the KPI and performance logic
- Translate functional requirements into ERP input
Approach
Transparency before organization design
Spend, supplier structure, contract coverage and actual FTE deployment were consolidated. Only then was it possible to distinguish structural issues, governance gaps and capacity constraints.
Centre-led, not centralized
The target model combined European leadership and standards with local accountability. Strategic categories and common methods were governed across the group, while operational proximity and market knowledge remained in the entities.
Make roles and decisions concrete
Roles were defined through mandates, decision rights, interfaces and expected outcomes – not job titles alone. Category leads, local procurement, engineering and management received a clear interaction model.
Connect transformation to the ERP window
Organization, governance and processes were sequenced to feed functional requirements into ERP design at the right time. The system became an enabler of the operating model rather than a substitute for it.
Outcome
The blueprint created an aligned target state for the European procurement organization. It connected organization design, governance, roles, processes, KPIs and system requirements in one transformation logic.
- Management and functions worked from one decision basis.
- Strategic and operational responsibilities were separated clearly.
- European category ownership was embedded in the target model.
- Priorities and dependencies to the ERP programme became visible.
- Implementation could be broken into concrete governance, capability and process packages.
What made the difference
The target operating model was not built from an abstract best-practice template. It was derived from the actual spend, organization and capability situation. The target state was therefore ambitious but executable – and served as a functional design authority for the wider transformation.