A mature technology strategy is key in building best in class procurement departments
- Is it tied to corporate objectives or KPIs, such as “market competitiveness”, “acquisition strategy”, or “risk mitigation”
- Did a recent assessment initiative identify efficiency/effectivity gaps in the current technology infrastructure?
- Is the current environment full of manual steps and ad-hoc processes?
- Perhaps it just feels like the right time to better enable the procurement function via automation
All of these reasons have merit.. However, there are multiple ways in which you can embark on your journey from here. It ultimately depends on your organizations’ maturity at the strategic and operational levels.
Many procurement organizations are conflicted with determining who will guide them through the technology transformation. There are often a few scenarios that apply to assembling the team:
- Procurement leadership feels they can embark on the journey with the existing personnel, after all, ‘it can’t be that difficult’
- Functional procurement personnel embrace the challenge and are stimulated by the opportunity to volunteer to lead this journey, even with limited or no previous experience
- Hire an expert to provide guidance and expertise to ensure all aspects of the journey are achieved in a reasonable timeframe, holding them accountable
In many cases, the Procurement organization has high hopes for how they can pilot the journey and lead them to the destination. However, there are many hidden obstacles that can impede them:
- As many other corporate initiatives arise, competing priorities begin to burden the team and limit their effectiveness to continue the journey as planned
- As the journey begins, the team gains a deeper understanding of the obstacles ahead and they reveal some gaps such as insufficient capabilities and bandwidth constraints
- The team realizes that there is deeper level of expertise and market/industry intelligence needed to ensure a successful journey
This can be an effective approach for a more mature organization, since they’ve been on this journey before. However, for less mature organizations, this focusing purely on the external factors (providers, features and functionality), can present some danger to the journey.
In order to reach the destination, the team must chart a course that considers all the key aspects of the technology transformation, including the following:
- Develop a comprehensive understanding of current state and future state of the business process that will be leveraged using new technology tools
- Acquire alignment with the internal customers and stakeholders in order to best understand the pain points and opportunities for improvement and to establish their proactive participation in the transformation
- Establish both short- and long-term plans for technology deployment, including a formal business case and adoption strategy
- Gaining executive level sponsorship can make or break the journey – without it, the team will find themselves unable to tackle the many obstacles along the way
- Conversion of future-state business processes into detailed solution requirements that are aligned to industry best-practices in procurement technology features and functionality
- Management and execution of the solution configuration based on critical use-cases using 80/20 approach, avoiding cookie-cutter methods that can limit usability which tends to lead to workarounds
- Implementing a future state solution that meets or exceeds the original business case, to ensure that the expected ROI is achieved.
The challenges faced during the expedition tend to collide with each other over the course of the journey which requires a unique level of fortitude and expertise to successfully manage.
- Engage with key user groups at all phases of the transformation to ensure effective change management that will lead to user acceptance and adoption
- Establish a steering committee that employs clear lines of communication, decisive oversight and governance
- Establish and track against a formal success path that not only includes user adoption, but also key economics, KPIs and customer satisfaction
- Stand up a formal support function to provide the enterprise access to help tools and support personnel throughout the utilization of the technology