10 ways to ensure your procurement IT implementation will succeed

Author: Jonathan Dutton FCIPS

The recent annual PASA ProcureTECH conference in Melbourne, now in its 6th year, offered a dazzling array of useful free advice for busy buyers looking to implement new technology and automation tools in to the supply side of their business.

Jonathan Dutton FCIPS, who was the MC for the event, has transcribed the top ten tips offered by the experts throughout the conference: #ProcureTECH

Over 150 people attended the 6^th annual ProcureTECH conference hosted by PASA on 20-21 February – in Melbourne, on this occasion.

Some 18 of the top IT vendors in the procurement space showcased their products and services throughout the event and held numerous hyper-productive, half-hour, one-on-one meetings with procurement managers interested in learning more about precisely how they might fulfil their exact needs.

Meanwhile, next door, in the conference sessions, a stream of industry experts and experienced CPOs offered laser insights into what it takes to be successful implementing new cloud based, service-orientated technology into the procurement arena today.

One early speaker quoted Forrester, the IT research provider, whose work in the US suggested some 77% of major IT projects in the US outright FAIL. And, they add, many do not fail for technology reasons https://go.forrester.com/blogs/15-04-01-why_do_digital_business_transformations_fail/

As one speaker at ProcureTECH offered, “There was nothing wrong with the technology we purchased, our project failed for all the other reasons.” Forrester, like Gartner, who actually spoke at this event, offer a wide range of useful data and research directly relevant to procurement. They also comment and rate IT vendors.

Many of the hard-won lessons offered by some of the CPOs who spoke, as well as the consultants and experts who contributed, were so compelling that they have been collated into these TOP TEN tips on how to successfully implement your procurement automation project – or, more accurately perhaps, ‘how to avoid a costly failure’

Verbally, from the stage (rather than depicted in the PowerPoint slides) many of the TOP TEN tips were pretty pointed and offered with genuine passion:

THE TOP TEN TIPS from ProcureTECH

1. DATA is key …

It doesn’t matter which systems you are using or buying, the most important thing is that you are collecting DATA – however incompletely. The software and AI of the future (even today) can do amazing things with data lakes of poor quality information …. Always collect DATA, don’t discount it, and never throw it out.

2. Meet your business needs first …

Make sure your system solution meets the need of your business strategy first, your (real) customers second and your other stakeholders third – not the needs of the system itself (this is how it works), the vendor (this is how we do it) or even your IT department (this is how we want things).

 One key question to ask yourself is – am I automating the right professional process here? Is it good enough? Does it meet our true business need right now? Could it in future?

Bill Gates explained that IT was “brilliant at “amplifying mistakes.” Take the chance to redefine your business process to meet your business need, then automate that. Not the process you happen to have today, as a legacy of business history and past needs.

3. BYO user-interface …

Since the 1990’s it was IT heresy to even think of building a custom IT solution in-house. The overblown underdelivered IT projects of that decade killed the idea for years.

Yet, today, in 2019, building simple portals in the cloud is easy. Tools abound and are relatively easy to use and are often free. Numerous ‘review’ websites guide you through options and choices. Even average IT departments often have capability in-house.

And, simple tools (available either commercially or as open source options) like Microsoft BI, Tableau or even SharePoint, Access or Excel can offer amazing functionality for analysing core data. Linking portals to legacy systems is also easier today with proven APIs, basic middleware and easy-to-build APPS – some of which are free.

This approach opens a whole new potential IT strategy for buyers – putting bespoke user-friendly portals, that speak directly to your business and its finer needs, over clunky legacy systems, then filling in missing functionality with basic COTS (commercial off the shelf software) linked in to the single sign-on (SSO) portal using the data from your other systems. What could possibly go wrong?

4. Invest in your business case …

Build your business case for IT investment around solving your identified business problem, or capturing an opportunity to build competitive advantage from the supply side – not to just “improve efficiency” …. as that is never enough to justify wholesale transformational IT projects.

And, remember that transformation is a means to an end, not an end in itself: it needs a business case too – a strong one. Aim to try and spend ten hours planning and preparing for every one hour of the actual IT implementation curve.

5. Talk to the vendors …

Lazy buyers send out truncated EOI’s. These are often just a process to excuse a lack of market knowledge. Good category management or, in some cases, just good basic sourcing work, should tell you enough to long-list a viable pitch-list.

Take the chance to talk to the specialist IT vendors. They are experts in this area. They can tell you what others do, They can help you think through your NEEDS and your WANTS and help you to business case what will most likely work for you.

Use these conversations to compare and contrast. Take the chance to get free expert help from experts in the field. Go to EXPOs, use the conferences, take up no-obligation free meetings at events like ProcureTECH. Learn and apply.

6. Put A.I to work …

Artificial intelligence works. It loves dirty data, missing fields, legacy system feeds, data lakes and multiple APIs. And it learns as it goes.

Simply, AI can clean dirty data, analyse patterns and extract insights from the data hidden within your portfolio of existing supply side systems to identify new saving opportunities.

A.I. can also add missing data to complete the picture. All accessible through modern user-friendly and easy-to-use dashboards built on predictive analytics schooled on procurement data.

It can also be used to track savings, identify questions of risk, including modern slavery risks, or even to identify then redirect spend to minority suppliers such as indigenous, social enterprise or women led business enterprises.

A.I. can also interrogate data from multiple sources to track compliance of suppliers and contractors. Even incorporating feeds from external systems. Or data feeds or inputs from your suppliers.

7. Never launch with a BIG BANG …

IT projects, however large or small, very rarely step up to the pressure of “Ta Dah” reveals.              BIG BANG implementation projects don’t work in IT. There is simply too much that can go wrong. Too many variables. Too many detailed individual needs from one system solution. Too many stakeholders with too many parochial viewpoints taken from 360 degrees around the project.

Several of the experienced speakers, some with great pathos, advised explicitly against BIG BANG overnight cutover implementations. Rather, they advised, take a three step approach to success:

1. Business case strongly, then plan & prepare thoroughly
2. Under promise, then over-perform

• Build a phased roll-out, then gradually release new functionality in practical segments

BIG BANGS often mean BIG FAILS.

8. Double your change management budget …

In a last gasp effort to make the square business case fit a round budget hole, many corporate line managers will cut “non-essential” aspects of the new IT project to wiggle through arbitrary budgets. Change management often gets the chop at this stage. Along with training, nice-to-have -functionality, new releases, maintenance and project management hours.

Change management should not be optional. Change is never easy – certainly not in everyday corporate life. Under communicating a big project implementation with new technology, change processes and different ways can be the biggest contributor to failure. It empowers cultural resistance. Three quotations make the case for strong change management dramatically:

1. “There was nothing wrong with the technology we purchased, our project failed for all the other reasons.”  CPO client of vendor consultant speaking at ProcureTECH
2. “We underestimated the resistance to the new system at a working level” a former CPO

• “Culture eats strategy for breakfast” Peter Drucker

9. Embrace RPA …

Robotic process automation (RPA) is here. Almost one-third of the ProcureTECH audience admitted in a straw poll that they were looking at the possibilities. That speaker remarked a similar poll at a UK conference late last year offered 75% of the hands in the air.

Truthfully, procurement has a myriad of transactional and administrative tasks that are ripe for automation or robotic takeover – pointed out an inconvenient KPMG survey in 2015.  A recent Deloitte survey estimated 24/7 robotic costs at 10% of the costs of an Australian based FTE person working just 37.5 hours per week.

Procurement leaders should embrace automation through RPA. Because typically under-resourced procurement teams have other, more important, strategic work to do that we often have little time for. Tasks that computers cannot do well – like strategy, judgement and relationships. Like defining and implementing sustainable procurement plans, agile procurement strategies, procurement capability programmes and procurement technology projects!

We must shed work offering low returns on the investment in us, so we can take on work with high RoI.

10. Dedicate a Project Manager to your implementation …

Nothing fails quite so spectacularly as a failed IT project. They can be glorious in their failure. Forrester and Gartner have the data if you need it. The newspapers have the case studies.

One essential ingredient for a successful project is good project management. Bad project management will ensure failure. We live and work in a complex world. Managing complexity and a range of different outcomes for different users’ needs demands good project management.

The clever judgement comes from whom is best to be project manager – a procurement person, IT professional or business manager? Never the vendor, though. You have to own the thing.