Our previous exploration of Jeff Bezos’ two-way and one-way door framework provided a solid foundation for understanding decision types – those that are reversible versus those that aren’t. However, in today’s complex procurement environment, is that enough?
In procurement we face multiple competing priorities: strategic sourcing initiatives, supplier relationship programs, sustainability goals, and digital transformation projects, to name a few.
While the two-way/one-way framework helps us understand the nature of decisions, it doesn’t help us sequence them effectively.
This is where prioritisation frameworks become essential.
Consider this scenario: You have three major strategic sourcing projects, all classified as one-way door decisions due to their long-term impact. How do you decide which to tackle first? Or you have multiple two-way door opportunities – which will deliver the most value with your limited resources? This is where the marriage of decision and prioritisation frameworks becomes powerful.
By combining decision classification (is this reversible?) with structured prioritisation (what delivers the most value?), procurement leaders can create a robust approach to planning and execution. This integration enables teams to not only make better decisions but to make them in the right order, maximising impact while managing risk effectively.
1. The Procurement Prioritisation Matrix
The Value-Effort Matrix is a powerful tool in any decision-maker’s arsenal, but it takes on special significance in procurement. Why? Because procurement teams are constantly juggling multiple initiatives, each competing for limited resources. But here’s the thing – not all procurement initiatives are created equal, and that’s where this matrix becomes invaluable.
Let’s break down what we mean by ‘value’ and ‘effort’ in procurement terms.
Value isn’t just about cost savings anymore (though that’s certainly part of it). We’re looking at a broader spectrum: risk mitigation, innovation opportunities, sustainability impacts, and strategic positioning. Similarly, effort extends beyond just person-hours – we’re considering stakeholder complexity, market readiness, and implementation challenges.
Now, imagine plotting your procurement initiatives on this matrix. You’ll find they fall into four distinct quadrants, each requiring a different approach:
Strategic/Critical Initiatives (High Value, High Effort)
Think of these as your “bet the farm” projects. These are the initiatives that keep CPOs up at night but also get board-level attention. For example, implementing a new Source-to-Pay system or transforming your supplier sustainability program. These projects typically span multiple years, touch various business units, and require significant change management. Yes, they’re resource-intensive, but the potential impact makes them worthwhile.
Quick Wins (High Value, Low Effort)
These are procurement’s sweet spots – initiatives that deliver significant value without draining your resources. Picture consolidating spend across divisions for a key category or implementing a simple automation tool. The beauty of quick wins is that they often build credibility for larger initiatives. Look for projects that can be completed within 90 days and don’t require extensive stakeholder alignment.
Operational Improvements (Low Value, Low Effort)
Don’t dismiss these! While they might not make headlines, these initiatives keep the procurement engine running smoothly. Think process standardisation or supplier data cleanup. They might not transform your organisation, but they create the foundation for bigger changes. The key is to maintain a steady pipeline of these improvements without letting them consume too much attention.
Resource Drains (Low Value, High Effort)
Here’s where procurement leaders earn their stripes – by identifying and avoiding these value traps. These might be legacy systems that need excessive maintenance or over-engineered processes that deliver minimal value. The art is in recognising these drains and having the courage to say “no” or find alternative approaches.
The real power of this matrix isn’t just in the initial categorisation – it’s in the dynamic management of your initiative portfolio. Market conditions change, organisational priorities shift, and what was once a resource drain might become strategically critical. This is where systematic opportunity analysis becomes essential.
At Comprara, we’ve seen how structured opportunity analysis can transform this matrix from a static tool into a dynamic decision engine. Through detailed spend analysis, market intelligence, and supplier capability assessment, procurement teams can continuously identify and evaluate new opportunities. This systematic approach helps teams not only populate their matrix with data-driven insights but also track the evolution of opportunities over time.
We recommend procurement teams revisit their prioritisation matrix quarterly, using structured opportunity analysis to validate current positions and identify emerging opportunities. Comprara offers specialised analysis and advisory services in this area – you can book a consultation here to explore further.
2. RICE Framework in Strategic Sourcing
The RICE framework, pioneered by Intercom’s product team, has become a cornerstone of product management decision-making. It provides a quantitative approach to prioritising features and initiatives by evaluating four key dimensions: Reach, Impact, Confidence, and Effort. While originally designed for product teams, this framework translates remarkably well to procurement strategy. Why?
Because like product managers, procurement leaders face the challenge of prioritising multiple initiatives with limited resources, complex stakeholder landscapes, and the need for data-driven decision-making.
REACH
REACH In procurement, reach measures how broadly an initiative touches your organisation’s ecosystem. Think of reach as ripples in a pond – how far do they extend? Unlike product management where reach typically counts end users, procurement reach encompasses multiple dimensions of business impact.
The characteristics that define reach in procurement are multilayered. First, there’s organisational reach – which business units, departments, and functions will be affected? Then there’s geographical reach – does this impact one site, one region, or global operations? Finally, there’s temporal reach – is this a one-time impact or recurring benefit?
Let’s make this concrete.
Consider a supplier consolidation initiative: your reach might include five business units (direct reach), dozens of requisitioners (indirect reach), and hundreds of transactions annually (frequency reach). Or take a procurement technology implementation – you might reach 1,000 employees across 20 countries, affecting every purchase order for the next five years. By quantifying reach this way, you can compare seemingly disparate initiatives on equal footing.
IMPACT
In procurement, impact measures the potential value creation and risk mitigation of an initiative. Unlike product management where impact often focuses on user satisfaction or revenue, procurement impact has multiple dimensions that need careful consideration.
The characteristics of impact combine both quantitative and qualitative elements.
On the quantitative side, we’re looking at direct financial benefits: cost savings, working capital improvements, and process efficiencies. But equally important are qualitative impacts: risk reduction, innovation potential, sustainability improvements, and strategic supplier relationships.
The key is to develop a consistent scoring method that captures both dimensions.
For example, a supplier risk management program might show moderate financial impact (3-5% cost reduction) but significant risk mitigation impact (reducing single-source dependencies by 60%). Meanwhile, a payment terms optimisation project might deliver substantial working capital benefits (releasing $10M in cash) but minimal strategic impact. By scoring both aspects, you can make more balanced decisions.
CONFIDENCE
Confidence measures the reliability of your impact and reach estimates. In procurement, this dimension is particularly crucial given the complexity of global supply chains and market dynamics. Think of confidence as your “certainty quotient” – how sure are you about your assumptions?
The characteristics of confidence span three key areas: data quality, market intelligence, and execution capability.
High confidence scores come from clean spend data, deep market analysis, proven supplier performance, and strong internal capabilities.
Lower confidence might stem from emerging suppliers, volatile markets, or untested internal teams.
Consider a core supplier negotiation where you have three years of detailed spend data, clear market benchmarks, and an experienced team – this might score 90% confidence. Compare this to a new sustainability initiative with limited data and undefined metrics – perhaps a 40% confidence score.
EFFORT
Effort quantifies the resources required to deliver the initiative. In procurement, this goes beyond simple project hours to encompass the full spectrum of organisational investment needed.
The characteristics of effort include direct resources (team time, budget), indirect costs (stakeholder time, system changes), and opportunity costs (what other initiatives must we delay?).
It’s crucial to consider both implementation effort and ongoing maintenance requirements.
For instance, a strategic sourcing exercise might require three months of dedicated team time, significant stakeholder engagement, and moderate system configuration – high initial effort but low maintenance. A supplier development program might show moderate initial effort but sustained long-term investment in relationship management and capability building.
The RICE framework becomes powerful when these elements combine into a single prioritisation score.
The RICE score calculation remains
consistent: (Reach × Impact ×
Confidence) ÷ Effort = RICE Score
This quantified approach enables procurement teams to objectively compare diverse initiatives – from supplier consolidation to sustainability programs. Key to success is maintaining consistent scoring criteria and regularly validating assumptions against actual outcomes to refine future assessments.
However, remember that while RICE provides a quantitative foundation for decision-making, it should inform rather than replace strategic judgment. The best procurement leaders use RICE as one tool in their broader decision-making toolkit.
3. Cost of Delay Procurement Prioritisation Framework
While procurement teams traditionally focus on “how much” value an initiative delivers, we often overlook “when” that value needs to be delivered. This is where Cost of Delay (CoD) analysis becomes transformative.
Understanding Cost of Delay in Procurement
Originally developed for product development, Cost of Delay measures the economic impact of time on our decisions. In procurement terms, it answers a critical question:
What value are we losing by not
implementing this initiative right now?
This isn’t just about cost savings – it encompasses missed opportunities, increased risks, and lost competitive advantages.
Think about delaying a supplier consolidation project in an inflationary market. Each month of delay doesn’t just postpone savings – it compounds the cost as prices continue to rise. Or consider postponing a sustainability initiative as regulations tighten – the cost isn’t just financial but could impact market access and corporate reputation.
The Formula for Procurement CoD
While the concept is straightforward, applying it to procurement requires a nuanced approach.
Here’s how we calculate it:
(Value at Stake × Urgency Factor) ÷
Implementation Time = Priority Score
Let’s break this down:
Monthly Value at Stake includes:
- Direct cost savings or avoidance
- Working capital improvements
- Risk mitigation value
- Process efficiency gains
- Innovation potential
The Urgency Factor considers:
- Market conditions (inflation, supply constraints)
- Regulatory pressures
- Business criticality
- Competitive landscape
- Supplier stability
Implementation Time accounts for:
- Sourcing cycle duration
- Stakeholder alignment needs
- Transition periods
- Resource availability
- Change management requirements
Real-World Application
Let’s consider two competing initiatives:
Initiative A: A supplier consolidation project promising $1M monthly savings in an inflationary category
- Monthly Value: $1M
- Urgency Factor: 1.5 (due to 6% inflation)
- Implementation Time: 3 months Priority Score: $500K per month
Initiative B: A process automation project saving $800K monthly in a stable category
- Monthly Value: $800K
- Urgency Factor: 1.0 (stable market)
- Implementation Time: 2 months Priority Score: $400K per month
Despite lower monthly savings, Initiative A gets higher priority due to market conditions increasing its urgency factor.
Making CoD Work in Your Organisation
At Comprara, we’ve seen organisations transform their procurement impact by incorporating CoD into their opportunity analysis framework. The key is combining CoD calculations with structured opportunity assessment to create a dynamic prioritisation approach.
Success factors include:
- Regular market monitoring to update urgency factors
- Clear value quantification methodologies
- Realistic implementation timelines
- Stakeholder alignment on prioritisation criteria
- Integration with existing opportunity analysis processes
Remember, CoD isn’t meant to be the only decision factor, but rather a powerful lens for understanding the time-value relationship in procurement decisions. When combined with other prioritisation tools like the Value-Effort Matrix and RICE framework, it provides a comprehensive approach to procurement prioritisation.
Making Prioritisation Work: Implementation Guide
The frameworks we’ve explored – Value-Effort Matrix, RICE, and Cost of Delay – are powerful tools, but like any tool, their effectiveness depends on how we use them.
Let’s explore how to implement these frameworks in your procurement organisation effectively.
Choosing the Right Framework
Think of prioritization frameworks like different lenses in a camera – each brings certain aspects into sharper focus while potentially blurring others. But how do you choose the right lens for your situation? Let’s create a structured approach to framework selection.
First, consider your immediate needs:
Are you trying to communicate priorities across multiple stakeholders? The Value-Effort Matrix might be your best starting point. It provides an intuitive visual representation that resonates with both senior executives and operational teams.
Need to compare diverse initiatives with complex trade-offs?
RICE framework excels here, particularly when you’re weighing initiatives that seem like apples and oranges – such as comparing a supplier diversity program against a cost reduction initiative.
Working in volatile markets where timing is crucial?
Cost of Delay could be your primary tool, especially in categories experiencing significant price fluctuations or rapid innovation.
Here’s a practical decision tree to guide your choice:
Start by asking: “What’s my primary challenge?”
If it’s “We have too many initiatives and need to create clear priorities quickly” →
Use Value-Effort Matrix when:
- You need quick, clear decisions
- You’re doing annual or quarterly planning
- You need to communicate priorities broadly
- You have limited data available
If it’s “We need to compare complex initiatives objectively” → Use RICE when:
- You have good quality data available
- You need detailed quantitative comparison
- You’re comparing diverse types of initiatives
- You have time for thorough analysis
- You need to justify decisions to stakeholders
If it’s “We need to understand when to launch initiatives” → Use Cost of Delay when:
- You’re working in volatile markets
- Timing significantly impacts value
- You have good market intelligence
- You can update calculations regularly
- You need to sequence multiple initiatives
Often, the most effective approach combines frameworks.
For example, use the Value-Effort Matrix for initial screening, then apply RICE or Cost of Delay for detailed analysis of your high-priority initiatives. Think of it as moving from a wide-angle lens to a zoom lens – each gives you important but different perspectives on your procurement landscape.
The key is matching the framework to your organization’s maturity level, data availability, and decision-making culture. A sophisticated RICE analysis might be perfect for a data-rich environment but could create analysis paralysis in an organization that needs quick, clear decisions.
Remember, the goal isn’t perfect analysis – it’s better decisions. Start with the framework that best fits your current needs and capabilities, then evolve your approach as your organization’s prioritization maturity grows.
Leveraging AI and Data Analytics
AI and advanced analytics can transform how we prioritise in several ways:
- Pattern Recognition: AI can analyse historical project success rates, identifying characteristics of high-performing initiatives that might not be obvious to human analysts.
- Market Intelligence: Advanced analytics can track market indicators in real-time, automatically adjusting urgency factors in your Cost of Delay calculations.
- Scenario Modelling: AI-powered tools can simulate different prioritisation scenarios, helping you understand the potential impact of your choices before committing resources.
Change Management: The Human Side of Prioritisation
Here’s a truth many overlook: the most sophisticated prioritisation framework will fail without effective change management. Why? Because prioritisation isn’t just about making decisions – it’s about changing how people work.
Start with stakeholder mapping. Who will be affected by your new prioritisation approach? What are their current decision-making processes? What might make them resist change?
Build capability gradually. Don’t try to implement all frameworks at once. Begin with the Value-Effort Matrix for its simplicity and visual impact. As your team becomes comfortable, layer in more sophisticated approaches like RICE or Cost of Delay.
Measuring Success
Effective prioritisation should improve three key areas:
- Decision Speed: Are you making decisions faster without sacrificing quality?
- Value Realisation: Are you capturing more value from your initiatives?
- Stakeholder Alignment: Is there better agreement on priorities across the organisation?
Track metrics in each area:
- Average time from opportunity identification to decision
- Percentage of initiatives delivering expected value
- Stakeholder satisfaction with prioritisation process
- Resource utilisation rates
- Value leakage from delayed decisions
At Comprara, we’ve found that organisations successful in implementing new prioritisation approaches share three characteristics: clear executive sponsorship, strong data foundations, and a commitment to capability building. Our opportunity analysis framework can help you assess your organisation’s readiness and develop a tailored implementation plan.
Remember, effective prioritisation isn’t a destination – it’s a journey of continuous improvement. Start small, measure results, and adjust as you learn. The goal isn’t perfection but better, more consistent decision-making that drives procurement excellence.
Bringing it All Together
As we began this exploration, we discussed Amazon’s powerful one-way and two-way door framework – a foundational approach to understanding decision reversibility. Think of it this way: the one-way/two-way framework tells us the nature of our decisions, while prioritisation frameworks tell us when and how to make them. It’s the difference between knowing a door is one-way and knowing when it’s the right time to walk through it.
This combination gives us unprecedented clarity in procurement strategy.
Consider a major supplier consolidation initiative – it’s clearly a one-way door decision, but when should you execute it? That’s where our prioritisation frameworks come in. RICE analysis might reveal its broad organisational impact, while Cost of Delay calculations could show why acting now is crucial in an inflationary market.
Building a balanced procurement strategy requires this dual perspective.
Start by mapping your decisions using the one-way/two-way framework. Then, apply the appropriate prioritisation tools – Value-Effort Matrix for portfolio-level planning, RICE for detailed initiative comparison, and Cost of Delay for time-sensitive decisions.
This isn’t about making perfect
decisions – it’s about making better
decisions faster and more consistently.
By combining decision classification with robust prioritisation frameworks, you’re equipped to navigate procurement’s complexity with confidence.
How Comprara adds unique value in implementing prioritisation frameworks:
Think of implementing new decision-making frameworks like renovating a house while living in it. Yes, you could do it yourself, but having an experienced architect and contractor makes a world of difference.
Here’s why third-party procurement advisors prove invaluable:
Objective Assessment and Fresh Perspective
Internal teams often struggle to see the forest for the trees. External advisors bring a broader market perspective and aren’t constrained by “this is how we’ve always done it” thinking. They can objectively assess current processes, identify blind spots, and challenge assumptions that might be limiting effectiveness.
Cross-Industry Best Practices
While your team might handle a major transformation once every few years, consulting firms do this continuously across different organisations and industries. They bring battle-tested methodologies and can share anonymised insights about what worked (and didn’t) in similar situations. This accelerates your learning curve and helps avoid common pitfalls.
Expertise Implementing new decision frameworks isn’t just about the tools – it’s about changing how people work. Professional advisors bring proven change management methodologies and can help navigate political sensitivities. They often serve as neutral third parties when building consensus across different stakeholders.
Resource Augmentation and Knowledge Transfer
Rather than struggling with limited internal resources, advisory firms can provide experienced professionals to support implementation while building internal capabilities. Think of it as “teaching to fish” rather than just “providing fish.” They can:
- Train teams on framework application
- Develop customised tools and templates
- Coach leaders through complex decisions
- Facilitate prioritisation workshops
- Support data analysis and validation
Accelerated Implementation
External advisors can compress implementation timelines by bringing pre-built frameworks that can be customised rather than starting from scratch. Furthermore we maintain momentum when internal resources are pulled into operational issues and we fast-tracking decision-making through experienced facilitation.
Risk Mitigation
Having experienced advisors helps reduce implementation risks not only through early identification of potential issues but also independent validation of assumptions.
The key is choosing an advisory partner with deep procurement expertise, proven methodologies, and a commitment to building internal capabilities rather than creating dependencies. The right partner accelerates your journey to more effective decision-making while ensuring sustainable long-term results.
Need help getting started? Comprara’s expertise can guide you through this transformation, ensuring your procurement function delivers maximum value.
