Solution

3.0 Requirements to initiate and prepare introduction of category management process

The importance of introducing category management strategy for Oxy is guided by view that various spend categories are procured different, varying times and conditions. To appreciate the demands for initiating and preparing implementation of category management strategy, it is important to prioritise on internal and external factors (Zhang & Dong, 2020).

Considering external factors, category and contract management are important for embracing modern technology as a strategy for change management implementation. By use of PESTLE Analysis Tool (CIPS, 2023), to identify macro-environment factors directly impacting how they promote and impact change strategy by Oxy Organisation.

Table 1:Summary of Oxy PESTLE Tool

Additionally, in order to achieve internal analysis, SWOT analysis prioritising on strength, weaknesses, opportunities and threats (internal and external factors) considered. The different factors include;

Strengths– This entail Oxy following specified standardisations, guide and policies for their category and contract management process. By investing in modern technologies, Oxy is able to implement detailed reporting, plan, efficiencies and effectiveness.

Weaknesses– Oxy organisation rely majorly on conventional sourcing strategy hindering successful contract and category management. The engaged category managers for HS&E procurement area are mandated in implementing contract management dispute of insufficient appreciation and aware of the process. In Oxy case, they do not understand existing laws to implement contract management. The outcome of the weaknesses include;

• Delay in contract management implementation hence delaying project from the initial phase and organisation costs incurred
• Reduced scope of negotiations success and reworking for entire terms and conditions
• Compliance on varying challenges and barriers for poorly made performance
• Ineffective approvals and to sign appropriate workflow

Opportunities– To modernise contract and category management, Oxy organisation is supposed to holistically integrate the PCT systems in different practice segments.

Threats– Different competing parties and entities providing HS&E hence failing in providing on-time and projected offering areas with costs used.

In line with PESTLE and SWOT analysis (Widodo et al., 2023), the contract and category management is important for sourcing HS&E having enormous demand and various suppliers. Category management relevance is initiating different initiatives for effective sourcing and good image for Oxy procurement team. In overall, this contribute to leveraging on economy of scale with discounted costs and supply plan aggregated for covering multiple transactions. In CIPS (2022) report, the category management is relevant for Oxy procurement identifying, preparing, delivering and improving their operations.

Figure 1:Category Management Cycle

Source: CIPS.org/category-management-cycle

For identifying the requirements to initiate and prepare introduction of category management process, figure 6 first and second steps which are initiate/prepare and identifying and prioritising opportunities can be put into account.

Scope of the Category

To start with, the scope of the category is identified. To identify the required capacity development strategies for the PS&M teams for success in category management

• Being in a position of identifying critical success factors (CSF) which are strategic and modernised contrary to conventional sourcing strategies and category management
• Initiate appropriate KPIs being important tools to map various categories directly and indirectly in their expenditures
• Innovativeness in improvement of their supply chain networks
• Administering and managing contract existing differences
• To assess overall risks and initiate appropriate management strategies as part of category management

Key Stakeholders

After identifying the scope of the category management, the subsequent step is identifying the key stakeholders. To identify the stakeholders, Mendelow Matrix Analysis can be used as illustrated in the following;

Figure 7: Mendelow Matrix Analysis in Oxy

Source: Summarised from Oxy Organisation internal data

Keep Satisfied- In category management implementation, HSE departments and Oxy management would elicit less influence and interest. In category management, they would need to be kept satisfied with category management.

Minimal Effort- Oxy community in Oman and society of operation, have minimal effort in category management selection. Their involvement scope is in costs setting, aligning all logistics and L&D strategy.

Key Player- Oxy finance, P&SM and suppliers are engaged in influencing decision making. The scope of their inclusion is ensuring category management is in line with their expectations and set needs.

Keep Informed– Oman government and areas of venture has high-level interest and low influence on the category management process. This is since they manage the organisation wellbeing and best strategy to guarantee track of information availability.

Problems to be addressed

Currently, Oxy organisation has noted Health and Safety (HS&E) spend category does not use Global Procurement Contracts (PCT) in their active practices in contract management. This is in line with standards, guidelines and policies initiated. The outcome of this would include;

• Lowered scope of delays in contract implementation hence delay in projects and costs used
• Inappropriate negotiation quality and re-evaluating suppliers contract terms which lead to inconsistencies in Oxy laws and compliance
• Compliance and failing to successfully implement the contract owing to poor performance roles
• Inefficiency in gaining an approval and to sign their workflow

Support for the work, resources and skills required

In Oxy organisation case, for optimised practices, category and contract management is supposed to be prioritised with improvements achieved. Hence, this report will lead to establishment of an effective/appropriate PS&M strategy in Oxy. By considering HS&E category of spend, effective project and costs management would be improved with the set objectives noted. In order to evidence the essential for change implementation, various change management approaches as illustrated in Modules in CIPS would be prioritised. The factors for Oxy organisation which would be considered would include environment, market-based demands, imperative of business practice, cultural strategies.

Figure 1:Different Change Factors

Source: CIPS Notes

Also, for embracing category and contract management change for Oxy organisation, success to transition to different cultural acceptance needs would be important. The strategy is supported by Balogun and Hope Model (By, 2015) evidencing on change strategy success. Therefore, change practice would contribute to successfully adapting to the process and holistic evolution. This provide a good guide to alter their practice gradually illustrated below;

Figure 2:Extent and nature of change model

Source: CIPS Materials

Clear about High-Level Benefits and Risks

For Oxy case, their operations is informed by the fact that part of their background information is ensuring they are efficient and effective in their different sectors. The outcome of this is noting on major influence on generating revenue and cost management. This is at the same time making sure traditional sourcing process, costs saving and optimised practice is attained (Rubel, 2021).

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