Procurement is a function undergoing a robust digital transformation, and therefore purchasing digital ProcureTech solutions is becoming an increasing priority. Unfortunately, as we see from the graphic below. Many procurement teams have buyer remorse and/or don’t feel like their existing ProcureTech solutions are cutting it anymore.
The most apparent solution to a general dissatisfaction is pretty simple; upgrade to modern ProcureTech solutions. And, it seems as if Procurement Leaders will look to do just that in the coming years.
78% of CPOs (regardless of industry sector) were surveyed in PwC’s 2019 CPO Survey that they intend to invest in at least 3 digital solutions in the coming years (Pwc 2019). Demand for digital procurement solutions is high, and the supply of ProcureTech vendors is growing on a daily basis.
Consequently, buying is simultaneously becoming easier and more complex than ever before.
Market & vendor accessibility has created the emergence of new categories, niched products, and inflated customer expectations.
Procurement professionals are professional buyers. If there’s one function that the complexities of buying shouldn’t affect, it’s procurement teams. But, as the old sports adage goes, ‘On any given Sunday, any team can beat any other team.’ What I mean is, the complexities of buying digital solutions, can too, defeat even the most talented of buyers.
Ask the Experts
When you purchase a car, you consult with a car salesperson. Right?
Why would buying ProcureTech be any different?
Kodiak Rating is a ProcureTech provider in the domain of Supplier Relationship Management (SRM). Whilst we aim to build value for our customers, grow our brand and our position in the digital procurement market, we also aim to educate the market, consult practitioners, share knowledge, and do everything we can to make the lives of procurement professionals just a little bit easier.
Sometimes, that means pointing procurement teams in the direction of a competitor.
Our solution isn’t right for everyone, and we know this from the thousands of conversations we’ve had with practitioners from hundreds of organizations. Luckily, our team has big ears. During these conversations we’ve listened, processed and empathized. We’ve compiled a robust understanding of what it requires for large & enterprise organizations to evaluate, purchase, and implement new digital solutions.
It’s time to share our findings. This is how to buy a ProcureTech solution, and actually use it!
Tips from a ProcureTech provider.
1. Avoid too many cooks in the Kitchen
Procurement solutions can contain robust scopes, and often impact/optimize an organization’s strategy & processes cross-functionally.
Even if the application of ProcureTech solutions will result in more efficient operations, there is a wide set of stakeholder perspectives to take into account and expectations/feelings to manage when selecting the right tool.
In order for optimal results when purchasing ProcureTech solutions, the first step is to start an initiative and apply a steering or selection committee to project management. “The objectives that the organization is trying to achieve should be prioritized and agreed by key stakeholders, based on the ‘size of each prize’ and/or the criticality of the issues that will be addressed” (Harrington 2018).
If you have too many cooks in the kitchen, you’ll likely wind up in the final stages of the buying decision with an unclear business case.
2. Buy into the change
Purchasing technology, especially procurement technology typically requires change management.
If you’re going to successfully buy a ProcureTech solution, you have to ensure that everyone buys into change.
If there’s anything we’ve learned from Kotter’s 8-step change model, your guiding coalition of key stakeholders need to create a sense of urgency, create a clear vision & communicate the vision.
Your managers of change will be instrumental in communicating the desired change to other members in the organization. The goal of developing a vision and communicating the vision isn’t to just have people get behind something, but to live the vision.
Kotter’s states that the characteristics of a quality vision for change are:
Now that you’ve cleared the first hurdles, and the wheels are turning in your procurement org, it’s time to pump the brakes a bit and devise a plan.
3. Create a Digital Procurement Roadmap
As a backdrop to building a digital procurement roadmap, I believe it’s important to have some guiding principles.
Three guiding principles to keep in mind, courtesy of Nicholas Weber from Inviqa are:
- Avoid rigidity
- Involve key stakeholders
- Keep clearly defined goals and business objectives (Weber 2018)
Your roadmap will serve as the backbone to the body of digital procurement solutions you plan to co-exist in your digital procurement ecosystem.
This starts with defining which elements of your procurement process you’d like to optimize with the application of ProcureTech solutions. Put your S2P — procurement process on the wall, do a SWOT and/or gap analysis, understand where there are missing links, identify opportunities, and plan. Of course, your digital procurement roadmap needs to be aligned with, and pay respect to, your organizational roadmap.
Below is an example template, developed by Roadmunk, of what a digital marketing roadmap could look like.
Whilst this roadmap is marketing-focused and activity-based (not solely focused on the implementation of new solutions) it displays an exemplary structure for planning, delegating & executing.
Does every activity need to be planned down to the day? No, but without putting pen to paper, and mapping out your digital procurement roadmap, it will be difficult to know where, when and how to get started.
Prioritize, plan, act, and remain agile/flexible along the way. Oh yeah, and try to have fun! Remember, this is change for the future, and you’re going to be a part of it.
4. Trust the Process
Process, is central to every, and all, purchasing decisions.
Again, being rigid won’t help anyone, but having a process to fall back on has never hurt anyone. You now know where you want to go, who’s going to take you there, and everyone’s excited about it. It’s important now that you manage a process that will bring you to successful adoption(s) of the ProcureTech solution(s) you decide upon.
Below is a 5-step process, which our team at Kodiak Rating believes is best practice for purchasing a ProcureTech solution:
Research, Demo, Benchmark
Research the market. Whether you decide to do this internally or bring in external eyes (consultancy), it’s important to know what’s out there. See something during your research that seems interesting to you? Good, request a demo.
You’re not going to know the true ability for a solution to add value until you see the solution in action. Demo environments allow you to start verbalizing your challenges and allows you to initially qualify if a solution provider has a solution to combat those challenges. You should be able to put your challenges in front of a ProcureTech provider, and they should be able to offer a solution to those challenges. Research gives you a snapshot of what is out there, but demos give you a snapshot of who is out there. Your evaluation criteria of a ProcureTech provider needs to go beyond the software/hardware, and take into account the people that are providing the tech. These are, when it’s all said and done, your possible future partners.
What did you see? Who did you speak to? What didn’t you see? Who didn’t you speak to? It’s likely that solution research & demonstrations will be delegated to various members of the team. This is why sharing information and benchmarking is important for understanding vendor capabilities, market gaps, opportunities, and commercial implications/required investments. Some elements you should benchmark solutions upon are:
- User Friendliness; UX/UI
- Potential value-added of the solution
- Overlap/Potentiality to save on the replacement of existing systems
- TCO of implementation and continued use
- Onboarding requirements from your team — what will the solution require in FTE to implement?
- Scalability — ability to integrate across applications
- Security — Servers and Data
This is, of course, an initial evaluation, but make sure that you have a high-level understanding of criteria you find important after leaving the first meetings. After benchmarking, you can likely count out a few actors, whilst others will quickly rise to the top of the pile. This is why it’s important to know what you’re looking for, and have a well-aligned team who can discuss debate, but ultimately come to an agreement.
Define Requirements and Communicate them: RFx?
After benchmarking what the market has to offer, it’s time to start boiling down your team’s requirement list. This may be in preparation for a tender, or simply something you’d like to communicate to favorable vendors. One way or the other, the definition of requirements is key for realignment after the research, demonstrations and benchmarking phase. These activities could have brought your team further apart, rather than closer together. Not seeing eye-to-eye doesn’t have to be a negative thing. Strong opinions about what should be included (must-haves, should-haves, nice-to-haves) on a requirement list for a ProcureTech solution will result in a robust stakeholder perspective. While this may make the requirement list more difficult for vendors to meet with full compliance, it will help you to quickly sort out which vendors do and don’t have the functionality you and your team find to be necessary.
You gotta fight, for your right, to party! Now that you know what you want, you need to say it with your chest! Communicate your set of requirements to attractive vendors.
How you communicate your requirements is up to you. Run an RFx, or do something a little bit more ‘down-and-dirty’. This is something you may want to decide whilst creating your roadmap, so you can plan for the length of a full tender process. Again, this is why avoiding rigidity is important. Because, if you find a solution you want, and you know it’s the right fit, is a tender really worth the resources?
Shortlist and Test it!
Whether you decide upon running a full-blown tender, or a hybrid alternative to an RFx, you should always come out on the other side with a shortlist — AKA more than one alternative vendor. Keep things competitive with the solution providers you shortlist. I don’t need to tell you this, though. You’re a professional buyer. You know how to create negotiation power :))
Now, test it! Run a trial period, or engage the supplier to provide you and your team with a POC. While spending the resources on trying the solution yourself isn’t always necessary, seeing the solution in action, in line with your requirements, will make a future use case for you and your team all the more concrete.
It’s important to not just test the solution but put the solution to the test. It’s a rather standard procedure to ask for T&C, Technical Specifications, and possibly even subject the vendor to a security review. Again, this needs to be taken into consideration during roadmap creation as it will require resources from legal, IT & will likely take time.
Align & Decide
You came, you tried, you need to align.
Align within your team, and celebrate. You’re nearing the end of the decision making process. And, because you’ve taken the correct steps to get here, you’re not going to regret the solution you purchase.
Deciding upon the right vendor should be pretty simple if you’ve taken the proper steps previous to the decision-making stage, and have a robust set of evaluation material to base your selection upon. You’re a procurement professional, so I assume you have the whole Communicate, Negotiate, Terms & Agreement thing down, so I’ll spare you the details of entering/finalizing a contract agreement.
Implement & Adopt
You’re now in a post-contract phase. Feels good right?
It should! You’ve been thorough and have completed a purchase that will likely alter the future efficiency of your procurement organization. While this is a great accomplishment within itself, there is a good bit left in this purchase lifecycle…
Implementation & Adoption. AKA actually using what you bought. And, using it correctly. There are a lot of questions that need to be answered, and processes to be managed to ensure a successful implementation and adoption.
Let’s pluck the low-hanging fruit.
First and foremost, will you take an approach to evolution or big bang?
Whichever you choose, be realistic with the resources & FTE it will take from your team, external consultants and/or vendor implementation experts. “All key stakeholders and impacted parties need to have sufficient agreement and understanding of what successful implementation will look like and require, otherwise bottlenecks, delays, and apathy will inevitably occur” (Harrington 2018). Avoiding bottlenecks is easier said than done when implementing new solutions, especially if it requires team members to adjust their daily mode-of-operating.
Make sure that someone in the group of key stakeholders, or selection/steering committee, remains in an ownership role/project management role of the implementation. Own the solution you’ve been a part of purchasing, love it, use it, and get others excited about using it too!
It’s all too often that companies buy in new IT solutions and allow them to sit on the shelf like a can of beans. Even beans have an expiration date. If you don’t adopt the ProcureTech solutions that you buy, then your team will surely fall back on the tools that they relied upon pre-implementation.
Buying a ProcureTech solution requires your organization to spend money. But, actually using a ProcureTech solution requires time, energy, focus and most importantly — buying into change.