Planning and executing a complex sourcing project is no
small task. Procurement
teams spend months defining requirements, running a sourcing event, negotiating
with suppliers, and executing contracts. When an organized approach is followed
this typically results in substantial savings. Yet too often organizations fail
to realize the full potential of Procurement’s contributions due to
implementation challenges following contract execution. In many cases, 40% of
more of forecasted savings are not realized as a result.
The solution to this problem is Change
Management. While Change Management is more often associated with mergers,
acquisitions, and complex technology implementations, the reality is Change Management
will yield positive results for any initiative that involves change. It is
particularly effective at solving the problems that typically plague contract implementations
such as savings leakage and rogue spend. Below I am going to introduce three Change
Management tools than are useful when engaging with stakeholders throughout the
Sourcing
process and when implementing new contracts.
Stakeholder Analysis
Everyone knows we must engage the appropriate business units
when planning a sourcing event to define requirements. However, taking things a
step further and formally assessing the effects on different stakeholder groups
can provide tremendous value when we reach implementation. The purpose of
conducting stakeholder analysis is to ensure we identify ALL affected
stakeholders and gain an understanding of the ways in which they are impacted.
This will allow us to assess which groups are most impacted so we can be sure
to carefully target these groups and prepare them to purchase goods and
services once new contracts are implemented.
Resistance Management Plan
Resistance is the natural human reaction to change, and therefore
should always be assumed. Stakeholder attachments to their supplier
relationships is a prime example. While there is no magic answer to eliminating
resistance, early anticipation and planning will greatly mitigate the
occurrences. It is important to spend time considering which of the groups
identified in our Stakeholder Impact Analysis are most likely to resist purchasing
from new suppliers. Some basic questions we should be asking include:
- What are some possible resistance points: particular groups, locations, managers?
- What types of resistance should be expected: avoidance, rogue spend, vocally expressing discontent?
- What are the reasons for resistance: fear over loss of control, personal attachments to suppliers, concern over needs being captured?
Once we have identified our expected sources of resistance
and the underlying reasons, we can plan out tactics to neutralize the impacts. Reactive
resistance management is much more difficult and time consuming to resolve. Developing
a Resistance Management Plan puts Procurement in a proactive position and will
greatly accelerate our path to ROI.
Communication Plan
My final recommendation for integrating Change Management into
the Sourcing process is to develop a formal Communication Plan. The purpose of developing
a Communication Plan is to ensure all necessary stakeholders are engaged and
receive effective communications that will drive adoption. A well-designed Communication
Plan will ensure stakeholders are aware of the categories and suppliers impacted
and informed about important dates and timelines. A Communication Plan is also
a great way to engrain sponsor participation into the project plan which reinforces
the need to comply amongst stakeholders. The basic steps to completing a
Communication Plan include:
- Identify the audiences.
- List key messages and timing.
- Determine means of communication packaging, method, frequency, and sender.
- Convert into detailed outline and schedule.
Savings projections typically assume 100% adoption and
compliance. To come close to that mark all stakeholders need to know what categories
and items are changing, when the new contracts take effect, and how to purchase
the relevant goods and services. Following the steps outlined above to complete
a Communication Plan will ensure that all stakeholders receive this information
and are prepared as new supplier contracts are implemented.
Hopefully I have made it clear how incorporating Change
Management into the Sourcing approach will greatly improve the odds of Procurement
teams obtaining projected savings. When we achieve our saving projections, we improve
our standing amongst our internal stakeholders and clients alike and move
closer to reaching our goal of becoming trusted business advisors. If you are
interested in learning more or receiving services related to Strategic Sourcing
or Change Management, please visit our website.
Post A Comment:
0 comments so far,add yours