Is your organisation about to embark on an initiative to purchase and implement procurement software? Well, you’re bound to fail. Unless, of course, you address these landmines.
1. You don’t know what your requirements are
I’m sure you can define your problem. You can probably guess without looking. Lack of visibility, process, or control; maverick spending; inefficiency; mounds of paper…you name it. Immature procurement organizations that are not tech-enabled likely have it. But these are just the symptoms. It’s far more difficult to understand the underlying causes. Sometimes Procurement’s ills are simply the result of lacking the specific tool to drive efficiencies, increase visibility, etc. In many cases, however, things are the way they are for a much more complicated reason. The diagnostic process can prove time consuming, but accurately identifying Procurement’s sickness is the only way you can define and design a solution to cure it. Going through a robust requirements gathering exercise is an essential to step in selecting best-fit technologies.
2. You aren’t buying the right tool
Without its requirements defined, how can Procurement know what tool to look for? The underprepared organization is left to carry out solution design during the buying cycle, i.e. the sales cycle for software providers. This situation presents more than its share of headaches. For example, a common misstep is to buy P2P software to cure a lack of spend visibility (or simply because that’s what you had at your last company). Someone selling a P2P platform will happily show you all the ways their reporting will provide spend visibility. Of course this is after your RFP process (let’s say 1-3 months), implementation (6-9 months), and then onboarding and adoption to pull a full year of spend through the platform. What that provider might not tell you is that there are spend solutions out there that can pull together your AP data, classify it, and feed it back to you in a matter of weeks! That’s not to say P2P isn’t important for capturing savings, improving efficiency, and enforcing process compliance, it just may not be what you need right now. Once you have your requirements down, you need to rack, stack, and prioritize your objectives as well as the tools you’ll need to achieve them. Building a technology roadmap to understand the full scope of investment over time to meet your goals.
3. Change management isn’t just training…and you aren’t prepared
Speaking of P2P, have you thought of just how many people, departments, and processes these tools will affect? There are two factors that drive a successful technology implementation – strategic impetus and organizational readiness. If you have neither, you probably won’t get budgetary approval. But let’s assume that there is executive level buy-in throughout the organization to invest in procurement. Let’s even assume that one of those avenues is technology. Do they really know what these investments will entail? Does the rest of the organization understand the impact implementing a software platform will have on their people? Do you? If not, there are 2 options: 1) take some steps to get them on board, or 2) start with a less impactful investment that maximizes results and minimizes change.
For any platform, successful implementation depends on end users not just employing the software, but leveraging the technology (and doing so correctly) to derive the business outcomes you are looking for. Unlike more upstream procurement software modules like spend analysis and sourcing, CLM, SRM, and P2P touch various parts of the organization from Operations, to IT, to Finance, and everything in-between. This even includes the non-procurement stakeholders who will need to adopt the platform and the changes in process that come with it. Communicating, generating buy-in, and managing the change throughout the organization is a huge undertaking. Doing it successfully? That’s an even bigger ask.
4. You forgot to include your stakeholders
Speaking of stakeholders, did you forget to invite them to the design meetings? How about the kickoff? The demos? What about the project initiation meetings? If not, you are already behind the 8-ball. Stakeholders should be incorporated early and often. This includes requirements gathering and change management as mentioned above, but also the selection and implementation processes as well. Not caring about the current state that you are about to change is a mistake. Even if you think you know all of the ins and outs of the business (which you don’t), inclusion goes a long way in developing buy-in, encouraging adoption, and (let’s face it) making sure you don’t miss anything.
5. You don’t have a plan
Sure technology can probably solve your immediate issues, or put out the latest dumpster fire, but making tactical multi-year (and potentially multi-million dollar) investments in an ever-changing landscape is short-sighted to say the least. What is your ideal state? Do you want to develop a best-in-class procurement organization? Do you even need to? Do you want 100% spend under management? How do you even define spend under management? What will your organization look like in the future? How are you going to continuously improve? How do you define success now and in the future? And how are you going to measure that? These are just some of the questions Procurement needs to answer when defining their vision for the future. That vision should provide the foundation for your technology roadmap and ultimately determine the solution you select.
Done correctly, the technology selection and implementation process could be a once-in-a-career undertaking. Don’t make these decisions lightly. Remember that Procurement’s new tools have to outlive the hype surrounding them and provide for the function’s continued strategic evolution. Slow down, ask questions, encourage collaboration, and never let the discussion around the ‘next big thing’ force Procurement into hasty decision making.
Anthony Mignogna is a Director at Source One, a Corcentric Company.