The #1 thing that should guide your Procurement Technology Investment

Whether it’s the rise of social media, cloud applications, collaboration tools, advanced analytics, or something else entirely – technology is transforming how companies operate. Technology is offering new ways to drive efficiency and promote productivity in all areas of the business – Procurement is no exception. 

Digitalizing Procurement's processes can be exciting and impactful. The Hackett Group reports that digital solutions can boost Procurement's cost savings results by at least 22%. The challenge, however, is navigating the crowded market to find and partner with a procurement software provider that matches your procurement organization’s maturity and business objectives.

The Procurement solution with all the fancy bells and whistles might not be the answer for your challenges if, at the end of the day, its functionality is beyond what your procurement team is mature enough or skilled enough to adopt. This is where detailed Procurement Maturity Assessment and requirements definition is key. Start by identifying the challenges you’re looking to solve or the scope of work you'd like to see Procurement digitalize. This might include areas like spend visibility and analytics, contract management, procure-to-pay, etc. Gather feedback from members of your procurement organization to understand their pain points and what they feel Procurement should accomplish more quickly or efficiently. With their input, you can develop a cohesive challenge statement for Procurement. You'll also identify the business objectives you’re looking to achieve that will act as your guide throughout the procurement software sourcing process.

As you move forward with the sourcing process of identifying and engaging procurement solutions providers, keep those objectives in mind. Your RFP should capture the items your organization is looking for in a software provider. Be sure to communicate the business outcomes you’re looking to drive. And, do your homework. Be prepared to articulate the procurement processes currently in place as well as the improvement's your organization is hoping to see. 

Digitalizing procurement processes and investing in procurement software can be a multi-year – even a multimillion dollar endeavor for some organizations. As Procurement professionals, we pride ourselves in acting as the objective third-party for our internal stakeholders. Our clear-eyed perspective helps them identify the suppliers, products, and services that will provide the desired business outcome. However, taking an unbiased and fully objective approach to sourcing a Procurement software provider for ourselves is often easier said than done. Procurement organizations can benefit from bringing in a third-party procurement technology advisory firm to help with this decision-making process. The best will provide end-to-end procurement technology consulting. They'll work alongside Procurement to identify relevant business outcomes, match these outcomes to available Procurement solutions, and even over see the processes of calibration and implementation.

The procurement digitalization process doesn’t end after the procurement software has been deployed. Success should be measured in sustainable business results. Return to your north star - AKA the business outcomes you’ve identified when you began this initiative. Consider how those outcomes can be tied to specific metrics that demonstrate Procurement is solving the challenges you outlined. Embrace a mindset of continuous improvement as you pursue a full-fledged Procurement Transformation. On an ongoing basis revisit how you’re leveraging the tools at your disposal and the ways in which they could be more effectively utilized, as well as remaining privy to the available options to solve additional business challenges.

For more support on selecting and implementing a procurement software solution for your organization, contact Source One’s Procurement Technology Advisors.