“What’s the Best Procurement System?” That’s the Wrong Question

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Editor’s note: This is the second in a three-part series on digital disruption from a procurement professional’s perspectives. Read Part 1 here.

This morning I heard someone utter the question that elicits an almost primal response for anyone who works at the intersection of business process and technology: “What’s the best procurement system on the market?” Every time I hear it, my brain immediately flashes — That’s the wrong question.

Someone who tries to tell you what solution to buy without first trying to understand your goals and certain factors about your environment deserves a solid side-eye.

If you have an internet browser, you can find the latest Gartner Magic Quadrant reports on technology solutions. You don’t need a subscription, because most providers placed well in it will make it readily available as part of their marketing efforts. The technical evaluations of systems are pretty objective, and quite honestly, sometimes I have a hard time distinguishing among them on those factors alone. No one would deploy a system that didn’t meet some minimum level of functionality, stability and usability. At least I hope not.

You have so many technical options. Integrated suites give you a robust end-to-end solution. Niche solutions cover specific activities like contract management or supplier risk. Then hybrid solutions attempt to provide the best of all worlds — niche solutions that complement enterprise solutions. Every one of these options has value. How great that value is for your company depends on your answers to a different set of questions.

What Are You Trying to Accomplish?

This is all you really need to know, punctuated with a question mark. There are two primary responses to this for procurement. You want to make procurement easier or you want to save money. If you are looking at a system that doesn’t do either of these things, it might be time to regroup.

I know you’re already prepping your comments to this post about how we focus on lots of important things like risk management, supplier performance and improving compliance. I agree with all that. I also think that those activities have a better chance of success if you’ve nailed making procurement easier and saving money.

Don’t even talk to solution providers until you have a general sense of how you would answer this question. How does that saying go — “if all you have is a hammer, everything looks like a nail”? Figure out what you are going to do, and then evaluate your options. Don’t let a hammer turn your problems into nails.

Whose Problem Are You Trying to Solve? 

Getting into the minds of your users, stakeholders and partners should be one of the first things a team does when it is launching a systems project.

Suppose you are trying to address a “problem” with engineering going around procurement and engaging directly with suppliers. One possible — and frequent — response is to implement a system that directs users to only approved suppliers and to then crush the opposition with regular “compliance” reporting. Maybe the engineers really feel that procurement doesn’t do a good enough job helping them find innovative suppliers. In this case, you might have been better off spending resources on a supplier discovery solution, not an ordering solution.

We all tend to approach things from our own perspectives. In the world of procurement systems, this is really important because we can tend toward the punitive and bureaucratic. Ignoring the user experience can leave you with a solution that makes your team happy but leaves the rest of the business with something complicated, “heavy” and definitely not user-friendly. That will do nothing to raise the profile of procurement. Eventually your happy team will wonder why nothing has changed in how the business thinks about procurement.

What Works in My Company?

This is where aspiration meets reality. No piece of technology is more powerful than organizational culture. In my experience, it’s important to consider a number of key questions if you want the best chance at success:

  1. To what degree is procurement centralized or decentralized? How big is my user base?
  2. How much geographic coverage will I have?
  3. What does my supply base look like?
  4. How do we feel about spending money on systems?
  5. What is the attitude about systems in general?
  6. How easy or hard is change?
  7. What else is going on right now that could affect what I want to do?

Stakeholders are important, and each makes up the company culture. Once you understand what you are going to do, step back and spend time evaluating the macro elements of your environment.

It’s easy to put your time and attention into the technology end of digital innovation. For sure, the projects can be expensive and cover a lot of ground in terms of time and people. I don’t underestimate the importance of benchmarking and solution evaluation. Getting the answer to what’s the right product is infinitely easier and more enjoyable if you have already asked the important questions. Knowing your objectives, audience and culture will make sure that you “nail” the solution.

Rebecca Karp is a principal of Sourcing Synergies, a procurement strategy company based in Chicago. You can reach her at rkarp@sourcing-synergies.com or follow her on Twitter @rebeccakarp.

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