How to Buy Procurement Technology 101, With a Public Sector Spin

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If you’re new to procurement or have been sitting on the sidelines just waiting to get a pinpointed primer to the profession, look no further than Public Spend Forum’s latest webinar, “How to Buy Procurement Technology – Getting Started.”

Like any 101 course, there are some fundamentals to consider before diving in.

“It requires an understanding of which facets of procurement you're trying to improve, which technologies in the market are best suited to your specific problems, and how best to engage vendors and structure agreements as you select a solution,” as the experts hosting the webinar put it.

Of course, the ensuing treatments of this webinar topic — provided by Pierre Mitchell, Spend Matters’ chief research officer, and Raj Sharma and Ash Bedi of Public Spend Forum — leaned toward those practitioners in the public sector.

However, a good chunk of the analysis and commentary is applicable to both public- and private-sector procurement organizations.

How to Buy Procurement Tech 101

No time to learn like the present, when there’s so much at stake.

According to the presentation, global public procurement spending totals some $10 trillion. Interestingly, as the U.S. federal government standardizes procurement technology and spending data, 36 of 47 U.S. states already use an e-procurement system, according to a National Association of State Procurement Officials (NASPO) survey.

The OECD and World Bank have also been advocating for global economies’ adoption of e-procurement technologies.

Why?

“A key point is that procurement technology cuts across the entire procurement lifecycle,” said Bedi, PSF’s managing director of strategy and research.

Indeed, from the “pre-award” phase (understanding the need and the spend, conducting research and analysis, and developing your procurement strategy) all the way through the “award” (RFX, negotiation) and “post-award” phases (ordering goods/services and managing performance), procurement technology can help tie it all together.

“There are [certain] sub-processes that are really suited to technology,” said Mitchell. “But it’s creeping into ever more processes, such as spend analytics, and really driving and improving workflow.”

A big unifying theme is the need to engage stakeholders early and often, with dashes of bid optimization here, better guided buying post-contract there, and ultimately better understanding your category spend and your existing suppliers.

Initial Guidelines

The analyst team on the webinar offered a host of guidelines to consider when getting started. A select few include:

  • Doing a “buy versus build analysis” before deciding to build
  • Prioritizing critical needs and building that into your evaluation criteria (not everything is equally important)
  • Ensuring an approach that emphasizes prototypes and pilots before full deployment of solutions

Mapping 4 Procurement Technology Segments to the Lifecycle

Ultimately the team segmented four crucial areas of the lifecycle and analyzed the suppliers within those areas to help a technology buyer understand “who’s playing where” and what their strengths are.

  1. Planning and research. The first segment tackles analytics and market intelligence and supplier networks and platforms.
  2. Solicitation and award. The second considers auction platforms, CLM and e-procurement tools.
  3. Ongoing Management. The third looks at SLM, CLM and supply risk.
  4. Full Suite. Running the gamut of the above three segments, this area covers sourcing, source-to-pay, and sourcing and supplier management solutions.

The team analyzed more than 100 suppliers per each of the four categories, offering breakdowns of their software models and their degree of public focus, among other key considerations.

For a full webinar replay, peep this. This is the first webinar in a series on how to buy procurement technology.

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