The Power of Technology in Procurement

Many procurement professionals understand the complexities of supplier relationships, best in class sourcing and negotiation strategies. These fundamentals make the procurement world go round. Technology however has not always been top of mind and has been adopted spotty at best. Many organizations could benefit from adoption of procurement technology, bringing attention to blind spots and further optimizing processes.

I have recently been involved in a large scale implementation of a P2P tool. I want to share some perspectives of what has gone well and some challenges we have dealt with along the way. My hope is that it will bring to light the value technology brings to the procurement world. Change is never easy but is the key to staying competitive and cutting edge. Good technology cannot be supported without the proper processes, change management and people. All of these are critical components to the process and help uncover pain points that exist in an organization to drive operational efficiency.

First off when I say P2P tool, I am referencing a few capabilities. First is cataloging and content creation. This allows end users to requisition/purchase negotiated items through preferred suppliers. Second is sourcing. Many times, RF(x) events are run through email and excel sheets. This is a largely inefficient process and will be considered a stone age tactic at some point in the future. An Esourcing tool can help streamline the bid process, keep you organized and able to focus on more strategic elements of the event instead of the tactical components. Third is payments. Technology can help enable the end to end process flow and cut down on payment processing time. It is important to note that you need the right technology to create a seamless end to end procure to pay process.

Many times, a procurement team is involved with national and preferred agreements with little sight into other tail spend in the organization. Technology helps to uncover those blind spots in spend and creates more visibility across the board. Opportunities are identified through this process in how to better manage the current supply base, consolidate suppliers, process payments more seamlessly and ensure contracted prices are honored. What I have seen through this process is a typical category management role gets elevated and becomes more strategic. This is a win because the more strategic we are able to get, the more potential opportunities for future growth.

Many challenges faced with technology implementation include resistance to change and user adoption. A P2P technology is no different. There is constant education that needs to take place to drive new behaviors in an organization. Driving compliance is great for operational efficiency and the bottom line, however many times compliance is not met with the best reception.

All in all, technology can be a very powerful tool in the arsenal for procurement professionals. It allows for optimization and better compliance while making the lives of everyone it touches more seamless. Additionally, it can help elevate the roles of those who employ it, making their day to day less tactical and more strategic.