SUN Value Model for Procurement Excellence​​

1. Introduction: The Strategic Evolution of Procurement

 

Over the past two decades, the procurement function has undergone a profound shift—from a transactional buyer to a strategic partner. In the 2000s, procurement was largely focused on cost optimization and compliance. Today, it plays an integral role in:

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• Delivering on corporate strategy,

• Managing supply chain risks,

• Driving innovation and product development,

• Enabling ESG and sustainability agendas,

• And even co-creating revenue streams.

 

This transformation demands more than functional expertise. It requires a new approach to governance, integration, and performance management across the enterprise.

 

HHC Innovation developed the SUN Value Model to guide organizations through this transition using a structured, measurable, and actionable maturity framework.

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2. Conceptual Foundations of the SUN Model

 

The SUN Value Model integrates both maturity progression and organizational alignment in a single framework. Unlike traditional maturity models that assess capability in isolation, SUN also evaluates the depth of cross-functional collaboration and strategic business impact.

 

The model is structured around two critical dimensions:

• Vertical Axis – Cumulative Value Creation: Measures the value generated by procurement over time, progressing from cost reduction to revenue enablement.

• Horizontal Axis – Organizational Integration: Evaluates procurement’s working relationship with internal stakeholders, from independent operations to full partnership.

 

The intersection of these dimensions defines four progressive stages of procurement maturity: Price Focus, Cost Focus, Value Focus, and Revenue Focus.

 

3. Structure of the Model: The Four Maturity Levels

 

Each level represents a distinct stage in procurement’s journey from tactical operations to strategic influence.

 

3.1 Level A – Price Focus

 

Procurement operates in a reactive, transactional mode. The primary objective is cost savings through price negotiation. Supplier relationships are short-term and tactical.

 

Key Characteristics:

• Focus on lowest-price wins

• Minimal stakeholder engagement

• Process-oriented around purchase orders and invoice matching

 

Core Capabilities:

• ERP/RFP usage

• Price benchmarking

• Spend consolidation

• Basic category classification

 

Collaboration:

• Works independently, little to no cross-functional involvement

 

Value Contribution:

• 0–2% short-term cost savings

• Low strategic relevance

 

3.2 Level B – Cost Focus

 

Procurement starts to develop a structured approach to cost optimization. This includes analyzing demand, managing specifications, and introducing advanced analytics.

 

Key Characteristics:

• Decision-making based on Total Cost of Ownership (TCO)

• Strategic sourcing begins to take shape

• Some internal stakeholder interaction is initiated

 

Core Capabilities:

• Demand and specification management

• Should-cost modeling

• Data-driven spend analysis

• KPI tracking and dashboards

 

Collaboration:

• Some integration with planning, operations, or finance

• Still functions with limited influence on business strategy

 

Value Contribution:

• 3–7% sustainable cost improvements

• Productivity gains and early operational synergies

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3.3 Level C – Value Focus

 

Procurement evolves into a cross-functional partner aligned with business goals. The focus expands beyond savings to include operational reliability, supplier collaboration, and internal customer satisfaction.

 

Key Characteristics:

• Cross-functional strategic alignment

• Collaborative supplier relationships

• Procurement influences service, quality, and speed

 

Core Capabilities:

• Supplier partnership programs

• Efficient inventory management (e.g., VMI)

• Integration of internal customer objectives

• Governance over supplier KPIs and innovation

 

Collaboration:

• Full partnership with internal stakeholders

• Joint planning, shared targets, and performance management

 

Value Contribution:

• Up to +7% in strategic value creation

• Procurement is seen as a business enabler

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3.4 Level D – Revenue Focus

 

At this stage, procurement directly contributes to innovation, revenue generation, and long-term business growth. It co-develops new business models, enables new markets, and ensures ESG compliance as a competitive advantage.

 

Key Characteristics:

• Procurement leads sustainability and innovation efforts

• Supplier ecosystems co-develop new solutions

• Risk management is embedded across the value chain

 

Core Capabilities:

• ESG and risk governance

• Strategic supplier innovation

• Business model development for critical inputs and assets

• Integration with product development and marketing

 

Collaboration:

• Procurement acts as a strategic advisor to senior leadership

• Partnerships extend beyond the organization

 

Value Contribution:

• +10% or more in cumulative business impact

• Revenue, market share, and brand equity enhancement

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4. Applications of the SUN Value Model

 

The SUN Model is not only a diagnostic framework but also a strategic roadmap for transformation. It can be used in:

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• Procurement transformation initiatives

• Capability benchmarking across regions or business units

• Sourcing strategy design and governance alignment

• Supplier segmentation and innovation programs

• ESG integration and risk-based procurement planning

 

Its modular and scalable nature makes it suitable for multinationals, public organizations, and high-growth scale-ups alike.

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5. Conclusion

 

The SUN Value Model for Procurement Excellence provides a forward-looking, measurable, and practical framework for redefining procurement’s role in the organization. By helping companies identify their current maturity level and providing a structured path forward, it supports procurement teams in delivering not just cost efficiency, but also strategic business value.

 

In an environment where supply chains are under constant pressure, procurement leaders must navigate complexity while remaining aligned with their organization’s purpose. The SUN Model enables this alignment and positions procurement as a driver of innovation, collaboration, and growth.