A procurement operating model refers to the structured framework that defines how the procurement function operates within an organization. It encompasses the organizational structure, processes, roles and responsibilities, technology enablement, and governance mechanisms that guide procurement activities.

A good operating model outlines how procurement interacts with internal stakeholders, suppliers, and other functions, as well as how it aligns with the organization's strategic goals. A well-designed procurement operating model enables efficient and effective procurement processes, ensures compliance with policies and regulations, fosters supplier collaboration, facilitates data-driven decision-making, and drives value creation through optimized sourcing, supplier management, and contract execution.