Big Ideas for Procurement Technology – Forget the System, Focus on People

We're pleased to feature this guest article from Tania Seary, the founder of three procurement related businesses including Procurious, which will power next week’s The Big Ideas Summit – the world’s first digitally led think-tank for procurement and supply chain professionals. To participate as a Digital Delegate for free, visit www.bigideassummit.com.

I like to remind my procurement peers that corporate history is littered with careers that have been made and lost on major technology projects. For better or worse, major IT implementations often become the legacy of our careers. Despite the importance of getting it right, time and time again procurement technology rollouts are sub-optimised.

Why? Because early on in the approvals process Chief Procurement Officers (CPOs) lose the fight on two fronts:

  1. Not having a seat at the boardroom table to act as an advocate for procurement’s needs from the enterprise-wide software
  1. A lack of sufficient resources dedicated to implementing the technology

Getting a seat at the table to influence outcomes is a constant battle for procurement leaders, which has been covered many times before. And as anyone who’s been through a new technology rollout will know, defining the specifications, selecting the system and vendor, gaining Board approvals and communicating the decision are just the beginning of the journey. The real work starts when you begin to implement the system.

So, in this discussion, I really want to focus on my second point, which is about ensuring you have sufficient resources to get the execution phase right. As the most senior leader of a function responsible for rolling out new procurement technology, the CPOs overarching goal should be to make sure everyone in the organisation, especially the C-Level, understand that a change in technology is about driving change in people’s behavior and work processes.

The weird part is that the C-Level understands the importance of behavioural change for system success, so why is it that the budgets for communications and training support are consistently shortchanged?

Is it greedy CIOs consuming the entire budget for their system configuration? Is it consultants clawing away at their share of the pie? Or is the budget just being used for the wrong things?

Whatever the reason, there just never seems to be enough money to go around when the rubber finally hits the road.  So, here are five ideas for CPOs to consider when trying to maximize the ROI for an enterprise-wide procurement system:

1. Use all the tools in your change management kit

For an enterprise-wide procurement system to be fully utilised, you need to invest in change management. A single training session with IT-generated documentation is not going to get you there. Often employees are shown how to use the system but given no context on why it’s important for the company, how it links to the business strategy and where it sits in terms of their previous procurement toolkit.

These points all need to be succinctly and consistently communicated through a mixture of useable documentation, face-to-face and online training, coaching and as part of new employees’ onboarding.

 2. Include the cost of change in the business case

Make sure you allocate enough budget to flex all the tools in your change management kit…and plan for the long-haul. An effective system roll-out in a global organisation can easily take two-three years.

 3. Embed technology change and outcomes in audit documents

What gets measured gets done – it’s the same for embedding a new technology. Make sure you have the systems in place to track progress against milestones, know what targets you need to hit and when, and make someone accountable for keeping this on track.

By making the new technology and implementation programme subject to audits during and after the change process, you can ensure that the right outcomes are achieved.

 4. Burn the boats

During the Spanish conquest of Mexico, Hernán Cortés, the Spanish commander, scuttled his ships, so that his men would have to conquer or die. When it comes to technological change, this is potentially an extreme course of action. However, it is also one that could have a higher success rate depending on the form of the technological change.

Killing off all the other technology systems and work-arounds and only having the new way of doing things available will ensure compliance with the new system. CPOs need to be brave and know the system works, but it’s a sure fire way to make people get with the new program.

 5.  Use the technology in the context of your broader procurement change program

All CPOs are running their annual strategies based on a central theme – cost-down, innovation, supply chain purity, etc. Make sure you position your eProcurement implementation within the context of this broader change program and demonstrate how using the system helps support your broader goals.

You can help overcome the natural resistance to change from employees by positioning the implementation in context.

 

The Big Technology Ideas set to shake-up procurement in the near-future will be a hot topic to be debated at the Procurious Big Ideas Summit in London on April 30. Leading technology influencers Tim Hughes, Lance Younger, Peter Smith, and Mark Perera wil provide their views on which technologies procurement professionals should have in their cross hairs.

Procurement professionals around the world can get involved and share their views by visiting Procurious and signing-up for the Big Ideas Summit. Join Procurious’ 5000 members as a free ‘digital delegate’ and Tweet your Big Idea using #BigIdeas2015.

 

 

First Voice

  1. David Lawson:

    In terms of change management – also think about how to market/ brand the project. It is not unusual for organisations to be implementing multiple change projects at the same time. You need to make the Procurement project stand out. Linking to the point re “burning the boats” it is arguably more effective to move quick to “get the pain out of the way” than attempt a long and slow roll-out that exhausts both the project team and the wider organisation. Finally, remember the project has an end date beyond which you need to ensure you have the right resource in place to maintain and optimise the implemented system.

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