At the Marcus Evans CPO Summit earlier this month transformation was a hot topic. In addition, almost every procurement executive listed adoption and collaboration as important challenges.
Transformation can only happen with collaboration and adoption between business units and procurement.
Here is a list of some of the challenges facing procurement teams in their transformation journey.
Challenges to Adoption:
- Management is reluctant to consider new best-in-breed solutions if the current system is “working”
- Lean teams react to stakeholder needs rather than working with business units to create strategic advantages
- Complicated end-to-end systems with long setup times sit on the shelf and offline tools that don’t require additional budget are used despite the data vulnerability issues
- Spreadsheets created by former team member must be recreated because documentation is nonexistent, and errors can be risky to troubleshoot
- Existing systems can’t easily import spreadsheet bids, and this increases the time and challenge of combining and analyzing the submissions
- Even if a new system has obvious advantages, there is a fear that it won’t work as well as advertised
- The only available time to implement a new system is nights and weekends and no one will support that
Challenges to Collaboration with Business Units:
- Existing processes to submit a request to procurement are cumbersome so stakeholders call or email requests and this adds to the time burden for RFPs
- Support for a common set of tools by key stakeholders and decision makers is lacking
- Finance and HR systems get priority in almost all cases regardless of the cost or ROI
- Accounting systems lack commodity, item or SKU details and this hinders the calculation of savings
- Historical data exists only if procurement keeps the records because there is no common data set
- Business managers resist centralizing purchasing activities and rarely believe that this will help improve the bottom line of their unit
If you are thinking “that is my reality” you are not alone.
There is hope.
Let me share the key points of a great success story for an organization that had been burned by a complex platform they had purchased for 20 users and collaborators the prior year.
The complex platform proved to be unwieldly and far too time-consuming for their wide range of procurement needs.
Procurement took the lead to find a nimbler solution. They did the research and brought their recommendation to senior staff. Their recommendation was approved with one big caveat – only two users were approved and only for the next year.
The two users were trained one-on-one on live events and were able to successfully launch five events in the first month.
They enthusiastically spread the word and two additional users were approve and trained.
Word spread within the 2 business units and other team members in those units wanted access.
The positive internal reports led to the company asking the solution provider to provide a demonstration to a larger group in person.
All the current users were invited, and they answered management’s questions. The solution provider then did a short demo and management approved an additional six users.
A year after the new system received conditional approval the company has 17 users and almost 30 events were launched in the most active month.
The procurement team is building a powerhouse data set of events that can be used in part or in total to launch new events.
Shared knowledge is growing through collaboration among the business units.
The procurement group knew that they needed tools that would be adopted and foster collaboration if they were going to transform the company.
They were unwilling to live with tools that didn’t support their goals. They found a better way.
If the eSourcing tools at your company are sitting on the shelf or are underutilized due to their complexity, it might be time to ask what can be done.
Ask better questions, make changes and 2019 will be your best year ever.
Action Step: If you are uncertain where to start the process of change, a procurement professional like myself can provide guidance and expertise to help your organization achieve the results you want.
If you want to go explore this topic in greater detail, please contact me. I invite you to request 30-minute discovery conversation. In my experience the next step will be apparent at the end of the call. I never assume that what I have to offer will be right for everyone, so don’t expect a sales pitch. You can reach me at 973-936-9672.
If you would like to know more ways to reduce costs without changing the way you do business, simply give me a call or send me an email with your contact information and the best time to reach you.
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Until Next Time, I Wish You Great Success in Your Business and in Your Life