The implementation of appropriate procurement technology promises several organisation-wide benefits. For example, automating key processes, such as due diligence and strategic sourcing, will enable procurement to take a much more strategic approach to spend management. One BCG study found that procurement technology can reduce an organisation’s annual spend by an average of 5% to 10%.
But before you take the plunge and invest a significant amount of money in new procurement technology, it’s important to address the following five factors.
1. Establish your key business objectives
With so many options on the market, it’s easy to feel overwhelmed or confused about what you really need and where to begin. A provider might well deliver a compelling sales pitch but does their offering actually cater to your business’ needs? To avoid investing in the wrong solution(s) make sure you’ve determined your organisation’s long-term business priorities and goals. This includes identifying the key challenges you hope to resolve. Are you finding it difficult to locate suitable suppliers, are your procurement processes slow and clumsy, or is maverick spending out of control?
2. Do your research
The procurement technology market is increasingly complex and ever-evolving. It’s important you’re up to speed on the latest innovations and understand the specifics of what different, niche providers have to offer. Don’t make the mistake of being misinformed or relying on outdated information.
By leveraging benchmarking tools that compare service offerings, consulting market trends, and reviewing customer case studies you’ll be equipped for more robust negotiations with your prospective suppliers, which will ultimately secure you the best deal.
3. Aim high but start small
When it comes to implementing new procurement technology, slow and steady really does win the race. It’s important to start with the basics and get them right before attempting to integrate more complex technologies. It’s tempting to invest in the most sophisticated and costly solutions, but no technology has the power to instantly solve every one of your procurement problems.
Integrating new technology with your existing solutions takes time, as does training and onboarding your team and helping them to adapt to new processes.
Even if you’ve invested in several new tools to completely overhaul your existing procurement technology, be sure to stagger the implementation process for the smoothest transition possible. You might also consider rolling out new technology to one geographical region at a time. That way, you can identify challenges and resolve them along the way to minimise the overall disruption to your organisation.
4. Ensure the technology integrates with existing technology
Investing in procurement technology is typically part of an organisation’s ongoing digital transformation. It’s important to align the two and be sure that any new solutions integrate with your existing tech stack. You’ll need to address issues of compatibility with your IT team and determine the need for an API (application programming interface) to link multiple solutions and systems. Your organisation’s compliance team must also be consulted to ensure new suppliers adhere to your existing data security guidelines.
5. Take the negotiation process seriously
You’ve established your business objectives, done your research, and consulted with all the necessary people within your organisation. You’ve read customer case studies, compared service offerings, and identified potential vendors. Now all that’s left is to make a decision based on your shortlist of suppliers and ongoing negotiations – but it’s not the time to get complacent.
Whether you feel like your mind is made up or not, it’s important to take a stringent approach to sales meetings and product demo sessions. Come prepared with questions for the vendor and make sure you’re resolved on a final budget. You’ll want to walk away from these meetings having gathered all of the necessary information and feeling ready to make an informed decision.
On the 24th and 25th March 2021, ANZ region’s Premier ProcureTECH Conference is going virtual. Join your fellow procurement professionals to explore a wide range of procurement enabling solutions in one place, at one time, from the comfort of your own desk. Find out more and register (for free!).