The number one mistake of Procurement Technology implementations

Getting a new Procurement Technology implementation set up is a daunting task, with implementation generally taking months. A large part of that implementation is building a new future state, and that is where the biggest mistake for most Procurement Technology implementations occur.

Most Procurement Technology implementations start at kickoff. In other words, the contract is signed with payments for the SaaS technology beginning that day, and then the vendor begins initiating the implementation process. During that, the vendor will ask seemingly endless amounts of questions around specific individual items depending on the modules you purchased: Approval flows, Purchase Order formats, required fields in supplier profiles, etc.

While there are many obstacles that can trip up an implementation, the biggest mistake companies can make in a Procurement Technology implementation is starting that future design at kickoff. Doing so means no time to see the entire design holistically but rather as individual requirements for each area as they come up. Doing it this way forces the company into performing a 'lift-and-shift' with little changes from the previous model, and that may not be the best way to execute it.

Some employees may have a change or two they would like compared to their current process, but haven't done much with it beyond some vague idea of what they would like. When implementation begins, there simply isn't enough time to go through and make major changes to the process without risks from not being able to fully think through the revisions.

In order to ensure a smooth implementation that addresses gaps from the current state, design needs to begin before supplier selection, and preferably even before sending out RFPs to suppliers. This way you not only know what the organization's future state design should be, you now have a list of requirements that go beyond feature functionality. That ensures your RFP is truly thinking about your organization rather than just a long list of features that may or may not actually be utilized. Those judging the RFP or seeing demonstrations from specific vendors know what to be looking for and the right questions to ask.

There are additional benefits. I hinted earlier at this, but when you sign on the dotted line for most Procurement Technology, you start paying for it from day 1. Depending on the vendor, modules, your company size, etc., that can cost anywhere from $5,000 to $50,000 per month. Hitting 'pause' at that point to figure out your future state will incur more charges and potentially additional change orders if your requirements have changed beyond the scope stated in the vendor's SOW.

This isn't only beneficial to making changes during the initial steps of the implementation. Having the major design ready before kickoff allows the design/architect phase of the implementation to speed up considerably, and can speed up future phases as well if the vendor has fewer follow up questions during the build phase.

From the many clients we've worked with on Procurement Technology implementations, we think it is a mistake to wait for the vendor to start kickoff before you design your future state. Doing so ahead of time allows for a shorter implementation cycle that reduces risk of delay, can save tens of thousands in SaaS payments, and enables a faster time-to-value for the Procurement organization.