This document outlines a 3 dimensional business assessment model for procurement organizations to create value. The main layer assesses risks, commercial opportunities, and value creation throughout the procurement cycle. The second layer examines how efficiency, sourcing, and innovation relate to value creation. The third layer measures the results of efficiency improvements, sourcing strategy development, and vendor innovation development.

1. Missing Bricks for Value Creation
3 DIMENSIONAL BUSINESS ASSESSMENT
Main Layer (X, Y, Z) Value Creation as function of Risks, Commercial and Opportunities
Main activity axes defined as Risk, commercial & Opportunity Assessments, Need to be continuously
performed at all phases of a future procurement cycle to secure value creation in all deliveries.
Second layer relationship (x, y, z)
Value creation as function of
Efficiency, Sourcing & Innovation
Between ‘’Value Creation’’ as the core delivery
of procurement organization through:
X,Y,Z (Efficiency, Vendor Innovation and strategic Sourcing)
1- Efficiency & Productivity Analysis
X- Value Chain Analysis
Y- Vendor Performance Analysis
Z- Vendor Business Review
2- Sourcing Analysis
X- Contract Analysis
Y- Service Level Analysis
Z- Cost Optimization Analysis
3- Innovation Analysis
X- Business Need Identification
Y- Vendor Capability Analysis
Z- Markets, Trends & vendor data mining
Third layer of measurable results (x,y,z)
It is the measurable results of Efficiency, Innovations and
sourcing strategy:
1- Efficiency & Productivity Improvement
X- Vendor performance & deliverables
Y- (BOM) Bill of material & Operations analysis through
(SOM) Service Operations Modeling
Z- Value Chain Optimization
2- Sourcing strategy development:
X- TCO reduction, Cash flow optimization
Y- Enhance contract compliance
Z- Improve service level
3- Vendor Innovation development:
X- Joint optimization initiative (existing state to generate
innovation based on company identified needs)
Y- Joint development initiative (Align vendor potentials
and company identified needs for innovation
development )
Z- Joint Market initiative (identified market opportunity
for mutual growth)
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