Are You Still Living with Procurement Tools Created in 2007?

Are You Still Living with Procurement Tools Created in 2007?

Procurement tools that were created in 2007 and earlier may work but they aren’t likely to make your organization a leader in your market.

Football teams are fascinating to study because they are in a constant struggle to compete and win.

Often the addition of one or two players can make the difference between winning now or missing out on the playoffs.

Releasing players that no longer fit the needs of the team is another way to improve. This is true even though those players are still productive. They may have become too expensive to keep for the performance they deliver.

If you seek job security and don’t like change, professional football should not be your profession.

The teams that change and adapt stay competitive for extended periods of time.

In procurement, one of the interesting issues I run into as a consultant is this:

The longer an organization has lived with a problem the less likely they are to change.

This is human nature. We hate change and we often fear the unknown.

Sales reps are part of the issue.

They will often promise more than then can deliver or provide a solution that is difficult to implement and use.

When this happens, it is understandable if you conclude you were better off doing it the old way.

Consider these three questions to help you determine if you should make a change:

  1. Have you quantified what this is costing you?
  2. Do you know what systems your competitors are using?
  3. Do you want or need best of breed?
  1. Cost
  • Many people automatically gravitate to the financial investment in a new tool or system.
  • This is an important part of the equation.
  • The time to implement can cost a lot more than the hard dollar investment.
  • Commitment is the third part of the cost equation. The time to train and become an expert should be high on your list.
  • Smart procurement professionals want the same experience they get when they buy personally – intuitive and easy to learn and use. Cumbersome and complicated won’t generate excitement on your team.

 

  1. Competitor’s systems
  • If your competition is winning battles you used to, it is likely that they have new tools.
  • Recently one of my prospective clients sent me a link that one of his suppliers had sent to him.
  • The supplier’s message was “this system is a whole lot easier to use then your outdated approach.”
  • Their first thought was “ouch” but then they realized that their supplier was doing them a favor. The tool looked good but had limited functionality for their purposes.
  • However, it made them realize that they needed to stop using Excel, Email and Word. Making life difficult for your suppliers is not a recipe for success in my experience.
  • Marketing and promotional materials for solution providers often list companies using their product or service. If that information isn’t listed, it may be provided on a confidential basis.
  • Employees who worked for a competitor can also provide insight into systems and tools used at their previous company.

 

  1. Best of Breed
  • This is an interesting debate.
  • My approach has always been based on this – I prefer systems that will give my organization the competitive advantage I am seeking now.
  • Systems change and so do capabilities.
  • Larger, more complex systems will take longer to implement. I would recommend you determine if you need to change everything. This is rarely the case.
  • For most organizations, purchasing a stand-alone solution represents a modest investment of dollars, time and commitment.
  • I understand that everyone wants to make the best short-term and long-term decision. Choosing a system that will provide an immediate boost in efficiency and effectiveness is often a smart choice.
  • Picking a tool that has the functionality you need now and functionality you will need to grow is another way to make the right decision.
  • Asking how much time and money the provider invests in product enhancements each year is a good question to ask. You may be surprised at the answers or lack of answers you receive.

Ask better questions, make changes and 2018 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) 718-7071 x875. The call will be forwarded to my mobile phone if I am not in my office which is pretty likely.

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.

You Won’t Drift to Success©

Commit to taking the next step.

Until Next Time, I Wish You Great Success in Your Business and in Your Life

Mike Jeffries