Month: April 2017

The procurement landscape is undergoing a seismic technological shift.

At the core of this digital transformation is the growing importance of procurement to the organization, new objectives for sourcing, and new technologies to reach them.

Procurement leaders are in the midst of preparing for and embracing a digital strategy for a competitive advantage within their categories. Organizations that are slow to adopt new technologies are exposing themselves to the risk of falling behind their industry rivals.

Perhaps more importantly, the top procurement teams are going beyond the technological ‘status quo.’ They are looking to the digital transformation of procurement as a means of achieving better performance and higher strategic goals—not just for themselves, but in comparison to their competition.

Getting there can mean asking the hard questions to evaluate where you stand, and what it will take to meet tomorrow’s procurement challenges. We’ve identified some of the key questions you need to ask when assessing your digital transformation:

Do a procurement ‘check-up’

What are your procurement objectives today? And how well does your technology support your team in meeting those objectives?

Your first step should be understanding where your procurement stands today; it’s difficult to plan for your potential future technology needs without addressing the gaps that currently exist in your processes.

Take stock of how well your current resources (including technology, but also include other aspects like team structure, budgets, personnel, skill sets, etc.) match your current procurement requirements and objectives.

Avoid the temptation to create a digital procurement strategy that only solves today’s problems. Your procurement digital transformation needs to also be strongly influenced by where you see your procurement processes in the next five or more years.

What’s the vision for your digital procurement transformation?

What’s your vision for the role of procurement in the not-too-distant future? What kind of goals will procurement be responsible for achieving? Does your vision for procurement align and support the overall organizational strategy?

We know that procurement is becoming an increasingly important value driver in most organizations. As your team’s role within the organization grows, procurement will feature more heavily in strategic planning and objectives.

Your digital transformation planning needs to address this growing role and your vision for the future of your procurement team. Your technology roadmap needs to be able to address today’s procurement needs, as well as the ones you expect to have tomorrow and beyond.

Making technology decisions is a long-term commitment—having a vision for the future is going to help you identify the technologies that will set you up for success in years to come.

What’s the plan to execute digital procurement transformation?

How will you achieve your vision? What milestones or dependencies are there to meeting that vision successfully?
You’ve identified the gaps in your existing capabilities and you’ve mapped out where you believe your procurement team is headed. With these in mind, you should start creating the plan for how you’ll get there.

It doesn’t need to be perfect, and you should assume that the details of the plan itself will evolve and change over time. As long as you have confidence in the foundation of your plan (the gaps that need to be filled, the strategic direction for the future, and so on), then your plan will help set you up for success.

Although the details may change, having measurable, realistic, and time-sensitive goals is important for keeping your plan on track.

Do you have the resources you need?

Does my team have the resources (time, budget, capabilities, tools, support, etc.) to execute against my plan?

In terms of your digital procurement strategy, the technology itself plays an important role. But you should also look at your plan holistically and look at all of the resources at your team’s disposal.

From a technology standpoint, you will need to carefully consider what eProcurement platforms will empower your team to meet your objectives—today and tomorrow.

Historically, organizations would look to larger ERP or P2P suites to solve their procurement challenges. Increasingly, the conversation around procurement technology is becoming “we already have a P2P suite… but we need something deeper for XYZ”. The use of best-in-class software, specifically SaaS platforms with API capabilities, is increasing.

As the new wave of eProcurement is arriving in the market, these tools can represent the most innovative and forward-looking solutions available. Today’s procurement leaders look at the kind of platforms which focus on delivering stronger value through workflow depth.

In today’s procurement climate, procurement leaders are making it a priority to improve their team’s efficiency and effectiveness. Any effort to improve their team’s capabilities is inevitably tied to technology and software.

These leaders are turning to the latest generation of eProcurement software to help achieve their goals and streamline their activities and workflows. These modern software platforms have the potential of supercharging your team’s performance and decision outcomes.

However, that’s only if your stakeholders are on board and are actually using your software.

If your end users — whether they are your buyers, evaluators, or executives — are not adopting your chosen software, your results (and your procurement strategy) are at serious risk.

Below are three risks you face when your platform suffers from poor user adoption:

1. Unrealized potential (or worse)

You can have the perfect software, but you won’t see the full benefits promised by the software if no one is using it. When you’re under pressure to deliver quality decisions with limited resources, this unrealized potential can have a devastating impact on your ability to meet your sourcing targets and objectives.

Not only can your performance plateau, it may even deteriorate. This is especially true if your new software was introduced to fix poor or declining performance in the first place.

2. Eroded return on investment

The benefits of implementing a new eProcurement software are often based on the resource gains from using it. This can be reflected in a variety of ways:

• Time savings through greater efficiency
• Putting more spend under management, or lowering purchasing thresholds
• Saving money on each project run (straight cost reduction)
• More strategic decision-making (contributing to organizational goals)

Ultimately, these factors add up to the overall return on investment for the platform.

You’ve identified the ways a new technology can help boost your team and your results, you’ve made the internal case, and calculated the benefits you expect to receive. Yet if your end users are not adopting your platform, the ROI is effectively zero.

After all, your investment in your software doesn’t decrease if your users aren’t using it.

3. Bad optics

The newest generation of procurement and procurement tools can act as a value multiplier and are a worthwhile investment. So when the implementation of these tools are successful, the benefits can be immediate and significant — both strategically and financially.

On the other hand, poor user adoption leads to missed opportunities and unmet expectations, the optics can look bad if not handled or solved relatively quickly.

This is especially difficult to take when you consider your motivation to improve performance — and how avoidable poor user adoption can be.

Better practices for driving user adoption

Whether you’re launching a new eProcurement platform or facing issues achieving the levels of end user engagement and adoption, there are a number of best practices you can follow to help drive better user adoption of your eProcurement software. Peggy Ferrin, Procurement Coordinator at the Town of Paradise Valley, explains that empathy is the secret sauce to compliance. Listen to more advice from Peggy in this episode of the Inside Public Procurement podcast.