Digital Procurement: How to make your digital transformation a success
Last week we were delighted to welcome Karthik Rama, The Procurement Doctor to The Procurement Roundtable for a fascinating discussion about ProcureTech and his lessons from nearly 20 years spent implementing technology solutions for Procurement teams. We've pulled together some of the highlights from the discussion to help you set your digital transformation off on the right path.
What should I realistically expect when using technology to solve problems?
There are 4 pillars to any digital transformation - People, Processes, Data and Technology. You need all 4 of these to work together for your Digital Procurement journey to be a success.
You have to recognise that technology on its own is just a tool. It might come in different shapes and sizes, make things go faster or at a bigger scale, but what shapes businesses is the behaviours those technologies facilitate in your people, processes and data, not the technology itself.
Technology is an enabler for your people and processes, but if you have fundamental problems with your business processes, technology on its own will not solve them.
"Just because I buy a tool, doesn't mean my problems are solved. Like I won't get six-pack abs just by wearing a FitBit."
Karthik Rama, The Procurement Doctor
How important is data to my digital transformation?
Data is the fuel that powers your digital engine, so the quality of your data will have a big influence on the success of any technology initiative. If you start with bad data in the system, you're only going to get bad data out.
You need a plan for how you are going to clean your data Unfortunately there are very few tools out there that can help, so this can be a very manual exercise.
Once it's clean, you need to think about what you need to change in order to prevent the data from eroding again.
What involvement should I expect from my team in my digital transformation?
Your team is probably the biggest source of insight to make your Digital Procurement project a success, for a number of reasons:
Firstly, you may not know exactly what the pain-points are in your Procurement operations, because you are not at the coalface. This is insight you can only get directly from your team.
Secondly, it will be your team, not you, who have to use the technology every day. If they don't think it will benefit them, they won't use it!
Thirdly, your technology initiative is only as good as its adoption. If no one uses the tool, it fails. Be involving your team early, they can be a powerful advocate for adoption once the system goes live.
5 steps to succeed with your digital transformation
The roundtable attendees identified five simple steps to make your digital procurement project a success:
1. Build a plan around the 4 pillars: People, Processes, Data & technology
Start by focusing on your people, processes and data. Technology then maps across what you understand about the first three.
Data is the fuel that powers your digital engine, so the quality of your data will have a big influence on the success of any technology initiative.
Automation is a powerful opportunity for Procurement, but it only works if your processes are sufficiently robust.
2. Be clear about what you're trying to achieve
What is the problem you are trying to solve and why it is important? Technology will not solve that problem by itself. Technology can define a set of standards, but those standards may not be relevant for you.
Make sure there is a dedicated project lead whose full-time job is to be accountable for its success.
Some scope creep is inevitable when trying to win hearts and minds, but it is important not to brush it under the carpet. Instead, define a set of 'phase 2' activities, so the requirement is acknowledged without disrupting your priorities for launch.
3. Know who your stakeholders are
Often it is the people who are most resistant to technology (change defaulters) who have more impact than those driving the project forwards (change enablers). They need to be front and centre when building your business case for the project
Some organisations will have more than one Procurement Lead, such as Direct vs Indirect or IT vs. Non-IT, which means both of these decision-makers need to be aligned.
You may speak a different language to your stakeholders (“spend” vs “cost”), so communicate in a way that they will understand.
4. Involve your team from the start
People will only use technology if they see value in it for themselves. As a leader, you may not know the intricacies of how the team works at the coalface, so it is important to listen to them and involve them in the design of the solution upfront.
'Proof Of Concepts' and trial offerings are a great way to test new tools with your teams before you commit to your chosen vendor. If your team sees value, they will be powerful advocates to promote the tool internally when it goes live.
5. Do your research
There are many more technology options available today than there were 5 years ago, and most will not feature on a Gartner or Spend Matters matrix. Do your own research and formulate your own views on the right toolset for your business.
All-in-one 'suites' offer a wide base of functionality across a number of operational areas and come with a lot of experience, but they are relatively inflexible when it comes to addressing very specific needs.
Best-of-breed solutions tend to be more flexible and offer more advanced capabilities when the problem you are solving is focused in a particular area, like apps on your phone, but you need to be prepared to administer and manage multiple systems.
If you'd like to be part of a future roundtable discussion, or if you'd like to understand more about how to better manage digital procurement in your organisation, get in touch with me at firstname.lastname@example.org