Put Strategy, Architecture and Knowledge First Before Evaluation and Selection in Procurement Technology Decisions

e-procurement market growth forecast NAN/Adobe Stock

All too often when it comes to technology, procurement organizations — and those firms that advise them — get overly wrapped up in functional selection and deployment compared with the bigger picture. As an example, let’s say an organization identifies a need for an e-procurement tool (or thinks it does). Procurement then jumps to internal requirements definitions, vendor shortlists, evaluation and selection — and eventually configuration, integration and deployment.

But there are up-front and interim steps that shouldn’t be missed, including the need to develop an overall procurement technology, analytics, integration and supplier network architecture that goes beyond e-procurement tools alone. (See a great piece by my colleague Pierre Mitchell tackling supplier networks, as an example.) Curious? We’ll be diving in head first and exploring bigger picture tech items (and yes, some modular areas too) at the ISM / Spend Matters Global Procurement Tech Summit taking place in Baltimore on March 14-16.

We can apply a saying of Baltimore’s own H. L. Mencken that applies to the topic. The satirist and journalist once quipped, “For every difficult problem there’s a solution that’s simple, neat and wrong.” In the case of procurement technology, if we take Mencken’s logic, then the wrong solution is jumping to select a specific type of module before thinking about technology from the ground up (versus top down).

Here are some quick tips to whet your appetite on the subject on the right way of thinking about procurement technology selection (which will hopefully entice you to join us in Baltimore!):

  • Develop an overall procurement information architecture (using our e-procurement example, see how workflow fits in or explore what Intel has done with supplier connectivity by thinking about the problem first before the solution).
  • Look at analytics as an enabler across technology, not simply as “spend analytics” or as a reporting tool that sits on top of other solution areas. Analytics is an overall procurement strategy, not a module!
  • Develop a point of view on technology priorities, not solution priorities — and map these to organizational competencies and areas of interest (outside of just procurement). For example, a company with overall initiatives centered on big data might want to look at how both internal and external information sets can feed into current or future procurement systems.
  • Understand the big picture of what drives adoption. (Hint: It’s not just ease of use on the desktop.)
  • Sound smart on the future. You need a point of view that can galvanize others to take action and excite them about where technology is headed and what it means for procurement. Spend time to understand and develop it. For example: What’s your view on blockchain? When commodity markets change course, how can analytics and targeted solutions help us to move quickly?
  • Develop allies internally outside of procurement (e.g., IT).
  • Tap your suppliers (all of them) for innovative ideas and technology on a category-by-category basis. For example, in the MRO sector, managed services providers such as SDI can bring both technology capabilities and domain knowledge — and even solutions that combine capabilities from different tech vendors and distributors that orchestrate integration and activities between key third-parties with your processes, systems and shop floor environment.

I look forward to seeing you and trading thoughts on how not to put the functional cart before the strategy horse at the ISM and Spend Matters Global Procurement Tech Summit in a few weeks.

Or of course you could just follow the Mencken doctrine of selecting technology partners: “He marries best who puts it off until it is too late.”

But let’s hope not too late!

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