Technology is a means, not an end

We continue our Procurement Transformation Guide with a look at the limits of how tech can help procurement.

Chances are that if you are in the market for a shiny new piece of procurement tech, you are already on board for the change it will bring and the necessary steps involved in its implementation. Everyone else might not be so ready, however. In fact, a major reason why these initiatives fail is that the people leading them are working with their tech-savvy biases and consequently skip over a few important points.

In business, and especially in the community of domain experts, there is a tendency to look at technology as the solution to all problems. Sometimes it even seems as if applying the latest gadget is the point. This, as Simona Pop says, misses the point of tech:

“Technology is not the end goal. It was never the end goal and treating it as such will lead to failure. Technology is a tool to empower people. You cannot and should not forget it’s all about people and the effect you/what you do have on them.”

Similarly, many organizations attempt to simply apply new tech to old practices. Sure, automating old, repetitive processes makes your work more efficient. Limiting yourself to automation, however, misses the potentially transformative impact that new tech can have.

Tied to this, if you fail to communicate why you want to implement a new tool, your initiative will likely fail because people will chafe under what they see as a pointless imposition. While this may seem obvious, the lack of a good reason for the change is actually a frequent mistake. In addition to not motivating people to accommodate, the inability to articulate a rationale for the change also affects your initiative by obscuring its scope and steps. This can lead to:

• Missing benefits, as some areas that should have been included in the scope will be left out.
• Implementing the solution on the wrong scope or on ‘everything.’ This will be very damaging, as it will give opponents of the change good arguments against the project.

The fact that there is often a misunderstanding of what technology can do, and, if you add on top of that, a weak business case, then it is no wonder that buying the right technology is often difficult for organizations. And buying the right tool starts with developing the right requirements.

Also, not having a proper requirement management process negatively impacts a project’s budget, schedule or quality. It can even kill a project. Often, requirements are developed or refined along the way. This leads to:

• Consuming time and energy that should be allocated to other activities.
• Making change management for requirement  gap analysis impossible as a reference or baseline does not exist.
• Making development, testing, and acceptance challenging and strenuous as there is no source of truth of what the deliverables should be.

The most self-serving issue here is that without an end beyond the implementation itself, you will have no way to claim credit for whatever successes the new tech may bring.

Moving too fast

This cognitive bias of favoring what a piece of technology can do leads to putting the tool in place without acclimating people to it. Didier Bonnet once wrote in the Harvard Business Review about how a CFO complained that “We’ve spent an awful lot of money on technology, but I still see people working in the old way.” 

Understandably, when an organization deploys a new solution, there is an implicit assumption that people will use the system. That assumption mistakenly links two states. To make a parallel with savings, the difference between a deployed solution and an adopted solution is like the difference between negotiated savings and realized savings.

The disconnect often occurs because of insufficient change management. People and organizations want to produce something, to show that their activities are worthwhile. This includes rushing the implementation of a new system. In some extreme cases, the planning phase ends before addressing questions like “When are we live?” or “When is the first workshop?” It is an interesting oversight for Procurement professionals to make considering that all know that 90% of the success of a negotiation is in the preparation. However, these mistakes can be avoided easily once you are aware that they exist and understand what implementing a new technology actually means.