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January 24, 2019 | Bonfire Interactive
Controlling rogue spending is the most ubiquitous challenge that procurement teams face when it comes to their indirect spend, according to ProcureCon Indirect East. At the heart of rogue spending is a disconnect between procurement and the rest of the company.
When stakeholders resist the procurement process and ‘go it alone,’ they introduce risk to your organization and leave cost savings on the table.
For that reason, getting stakeholders engaged with the process deserves to be a top priority for your procurement team.
There are various reasons that stakeholders may want to avoid participating in the procurement process. Realistically, some of these opinions or misperceptions are out of your control. However, one common concern which is well within your sphere of influence is stakeholders’ resistance to a slow, cumbersome, or difficult process.
RELATED: 5 Step Guide to Better User Adoption
According to a 2019 report by ProcureCon Indirect East, one of the underlying issues here is that many procurement teams do not have the technology support to help them run a modern and efficient process, or involve stakeholders easily in the process. Too many teams are trying to get things done with only the limited sourcing functions of their ERP, or no technology at all.
There’s no question that ERP systems are powerful. However, they’re also notoriously complex. Even for seasoned users, navigating the system can be a challenge. For occasional users — such as a subject matter expert participating in an evaluation — the challenge is magnified. Furthermore, ERP systems are not built with the workflows to support collaborative decision-making, providing only limited ways of involving stakeholders.
As a result, teams either struggle through the evaluation process in their ERP, or forgo technology all together in favour or paper, Excel, and email. This makes the procurement process time consuming and prone to error, which doesn’t help with procurement’s outdated image.
Modular sourcing software offers two main advantages: it is specifically designed for the sourcing process, which means it is easy-to-use and has the flexibility to support more collaborative evaluations.
“Modular cloud-based solutions provide stakeholders with an easy-to-use and easy-to-understand system that allows them the ability to get involved only when they need to be,” says Andrew Wolfe, a seasoned CPO and now principal consultant with Wolfe Procurement. “A modular system that is easy to use means great visibility and accessibility for team members at all levels, whether an executive role or an administrative manager.”
Modular sourcing solutions employ the same principles of user experience that underpin mainstream consumer apps (such as Google Maps or Netflix), so the systems feel familiar and work like stakeholders expect it to. Modular software platforms are also very agile, evolving through direct consultation with clients to fit their process and serve their needs better. As a result, little to no training is required for occasional users to participate, a crucial advantage over ERP system.
“In modular sourcing platforms, we’ve seen that stakeholder engagement has significantly increased,” says Wolfe. “In some cases, adoption is above 98% within that process.”
When stakeholders can participate easily in the procurement process, it enables fruitful collaboration to take place.
“Whether a company has multiple ERP systems, multiple operating entities, or they’re around the globe in terms of physical location—you need to get everybody putting all sourcing activities in that single spot,“ says Wolfe.
Conducting your sourcing in one user-friendly platform means you can:
This result is timely, confident spending decisions that drive better outcomes — not to mention better stakeholders relationships throughout the organization.
Read more about the risk of trusting your sourcing to ERP systems in the ProcureCon Indirect whitepaper Realizing a Better Alternative to ERP-Based Indirect Sourcing.