How to Gain Executive Buy-In for Law Firm Procurement Investments

Spend Matters welcomes this guest post from Clay Fox, a senior director at HBR Consulting.

Law firms are eager to implement procurement technology solutions. For example, the recent HBR Procurement Roundtable survey found that 53% of respondents plan to invest in spend analytics, 47% in supplier relationship management, 40% in contract management technology and 32% in invoice technology.

The decision to invest in procurement technology is smart — modern procurement tools help law firms operate more efficiently, mitigate risk and serve clients more effectively. The value that procurement investments bring to the firm helps the procurement function solidify its value proposition with the organization.

However, many procurement leaders face roadblocks in their plans to acquire technology solutions. It can be difficult to gain full support from executive decision makers, which limits the procurement function’s ability to serve as a strategic partner at the firm.

3 Steps to Build a Business Case for Procurement Technology

To gain executive support for procurement technology investments, procurement leaders must make a compelling business case that demonstrates the value of implementing new technology. Once procurement has tied its efforts to overall business priorities, it is important to track how well those investments perform and regularly report the findings to key stakeholders.

• Align procurement goals with the firm’s priorities

The first step in gaining executive buy-in for procurement investments is to align procurement’s efforts with the law firm’s priorities. While cost management is a top priority for all firms, some law firms also value other factors, such as risk mitigation, client service delivery, or diversity and inclusion.

With an understanding of the firm’s priorities, procurement leaders can more easily identify procurement technologies capable of supporting those goals and set themselves up for long-term success.

• Measure how procurement investments support overall priorities

The next step is to measure how procurement investments support the firm’s priorities identified in step one. As a baseline, all procurement functions should track metrics related to cost savings. Beyond that, procurement teams should measure all activities associated with achieving the firm’s priorities.

Other metrics to track include contract coverage (annual spend covered by contracts), risk profile (percentage of suppliers and spend with high or critical risk-rated suppliers) and supplier diversity spend (percentage of spend with diverse suppliers).

Most law firm procurement functions overlook the measurement step. According to the roundtable survey, only 39% currently track and report on performance metrics, meaning 61% do not. By skipping this step, it is difficult for procurement leaders to demonstrate the value of their investments to the organization.

• Report to stakeholders on a regular basis

The final, and most important step in making a business case for procurement technology is to regularly report the metrics measured in step two to relevant stakeholders. The reporting step is crucial because it demonstrates a clear connection between the procurement team’s efforts and achievement of the firm’s overall priorities.

These reports also help the procurement function build a business case for future investments. By demonstrating value to the firm, procurement leaders are much more likely to secure buy-in from leadership down the line.

The procurement function can play an important role in helping the firm achieve key goals. However, procurement is not often given a seat at the decision-making table. By working with firm leadership teams to tie procurement efforts to firm priorities, and tracking and reporting on progress, procurement leaders can demonstrate value and position procurement to serve as a more strategic partner to the firm long term.