Despite more than a decade of strategic progress, outdated tools and technology are still holding Procurement organizations in the tactical past. Without the appropriate level of automation and insight, purchasing teams leave themselves vulnerable to unexpected disruptions, undermine their internal authority, and limit their ability to generate value.
Managing a supply chain is all about steady innovation and adaptation. Even within small organizations, Procurement should strive to identify and introduce new tools. Tools for electronic sourcing, contract management, and vendor engagement all make it possible for the function to move away from its historically tactical workload and accept a more high-value role.
Navigating the technology landscape, however, is never as simple as tracing a route on a map. Hoping to land on a new solution? Check out our tips for traveling through the market.
1. Build the Business Case
Procurement's efforts to identify and introduce next-generation technology will go far more smoothly with executive leadership on-board. Before setting out on a technological journey, the department needs to educate its peers within the organization. By identifying the right metrics and developing resonant methods for reporting on them, Procurement can begin to frame itself as an enabler for business-wide growth.
Stakeholders throughout the organization need to understand that what's good for Procurement is good for the business as a whole. It's not enough for Procurement to identify how a new solution will help them. They've got to tell a compelling narrative that presents new technology as the missing piece they need to better serve IT, Marketing, and every other business unit. This could mean working against old misconceptions, but the effort will prove worth it when Procurement accepts a more prominent seat at the executive table.
2. Define Your True Requirements
In all likelihood, Procurement does not require the most robust or most expensive solution on the market. Bells and whistles are certainly nice, but they're often little more than a distraction from the function's real needs. Sourcing teams are used to differentiating between 'must haves' and 'need to haves.' They draw this distinction almost every time they send out an RFP or negotiate a contract. They've got to the same before looking into the market for solutions.
A thorough, honest assessment of both requirements and capabilities will help Procurement more confidently make a strategic selection. This period of self-reflection could make all the difference in avoiding the disappointment of either an overly simplistic or needlessly complex solution.
3. Look for Outside Help
Selecting and implementing Procurement technology is often a multi-year, multi-million dollar investment. It's imperative that organizations make the right decision the first time. Both job security and year-over-year performance could depend on Procurement's selections.
Going it alone is often more risk than Procurement can afford. A dedicated, well-vetted technology consultant could provide the appropriate level of guidance. Before engaging a consultant, however, it's important for an organization to determine where and when it will require assistance. Companies may find that assistance throughout the technology selection process is not enough. Where necessary (and possible), Procurement should identify third-party experts who'll provide support as the function assesses its needs and implements new solutions. Such end-to-end technology support will keep Procurement from hitting snags and ensure they realize their new solution's maximum value as efficiently as possible.
4. But . . . Take Recommendations with a Grain of Salt
Even organizations that make a point to look for outside help don't always do their due diligence. After all, there's a lot of hype out there and the conversations around disruptive tools are only growing louder. Procurement can find it tempting to take sales pitches at face value and mistake 'too good to be true' for 'too good to pass up.' Many don't realize they've made this mistake until it's far too late.
Publications like Gartner's Magic Quadrants only complicate matters. Though they provide a less-than-comprehensive look at the provider landscape, they're often the first and last source that organizations consult. Before leveraging a so-called 'magic document,' before placing trust in a consultant, organizations need to truly understand what it is they need and why they need it. Without this period of self-reflection and realistic forecasting, they could find themselves falling prey to flashy rhetoric and selecting mismatched solutions.
Reach out to Source One's Procurement Technology advisers today to learn more about how you can equip Procurement for the function's digital future.