Spend Matters welcomes a guest post from Shannon Lowe, Marketing Communications Manager, and Mark Schaffner, VP of Marketing, Verian.
What’s the difference between organizations that achieve visibility, control, and savings by successfully implementing purchasing automation and those that struggle to get their systems off the ground?
Here are six insider tips gleaned from a recent interview with a best-in-class company that implemented a purchasing system three years ago. It’s helping them profitably manage over $100 million in indirect spending, up from $8 million when the project began.
1. Begin with the end in mind.
Before starting anything, develop a vision. Work to align affected departments, and ultimately, the entire organization behind the understanding that purchasing automation is the tool that will help diagnose and solve the company’s spending problems.
2. Don’t be afraid of a little discomfort.
It’s the purchasing system’s job to shine the light on items and behaviors that are creating problems, and costing money. It’s revealing and even uncomfortable at first, but using that discomfort as a catalyst for change is essential to overcoming challenging purchasing patterns.
3. Validate needs and solutions with convincing reports.
A capable purchasing system will provide robust reporting capabilities. The most convincing reports are those prepared with the audience in mind. Determine who needs to see what, and use those needs to develop telling KPIs and reports. This results in irrefutable evidence for a need to change, and resounding validation for the system.
4. Use the system as a way to strengthen purchasing relationships.
Standardizing purchasing via automation is not about good guys vs. bad guys. It’s about gaining visibility into the company’s buying activities to produce a more intelligent and profitable supply chain for everyone. Use the purchasing system as a way to build trust between the people who need the stuff and the people who buy the stuff.
For example, at the company being interviewed, front line employees continue to tell purchasing what’s needed to get the job done and purchasing gets to pick the preferred supplier. This has created a win-win situation, and it’s gone over a lot better than purchasing simply trying to tell people what to do.
5. Go for quick wins, and build on them.
What’s spending problem is causing the biggest pain? Number of vendors? Off-contract pricing? Cost coding? Invisible invoices? Using the purchasing system to isolate, prioritize, and solve the biggest pain points will yield quick ROI and contagious momentum.
6. Stick with it.
User adoption of a purchasing system takes time, but patience and persistence pay off. There is no replacement for excellent training and support, and willingness to coach people through the more difficult aspects of implementation. This demonstrated commitment ultimately produces shorter learning curves, and a much quicker path to winning results.