Implementing Procurement technology is a red flag for many executives that brings up nightmares of lengthy and costly past endeavors that ended with the wish for something more – or something else.
While modern Software as a Service (SaaS) offerings don’t require much IT involvement and are technically ready to use as soon as logins are provided, implementing Procurement technology requires more than simply buying a software license.
When it comes to implementations, Procurement Suites and Best-of-Breed solutions differ in terms of their technical set-up, their requirement for customization, and the length and cost of the process. But neither of them is just about the technical implementation. Technology is about enabling and empowering people. Therefore, bringing people along on the journey and having a clear focus on managing the change is what makes or breaks a Procurement technology implementation.
Why do so many tech implementations fail?
The success or failure of tech implementations sits in the eye of the beholder. Failure, like success, is a very subjective feeling unless it is objectively measured. Without clear objectives and a common understanding of what success looks like, most implementations are doomed to fail before they have even started.
On top, many organizations underestimate the importance of a professional software implementation. A singular focus on the software license cost paired with an underinvestment in the implementation of a solution often results in the inability to demonstrate or deliver the value promised by the business case.
What does success look like in implementing Procurement technology?
While each solution and its value proposition are different, success is mostly measured in user adoption, process improvement, and/or value delivery. Examples for common objectives include ‘100% user adoption’, ‘solution fully rolled out to all relevant users in all regions’, ‘savings value delivered’, or ‘process time reduction achieved’.
To ensure Procurement successfully realizes the full potential of its technology investment, a holistic approach to implementing software and enabling the team is required. A professional software implementation requires a dedicated team, clear objectives and a comprehensive implementation strategy that includes elements like project management, governance, communication, change management, training & enablement, and hands-on support for making the first step
What are the building blocks for a successful procurement technology implementation?
By investing time and resources upfront into devising the most suited implementation approach, Procurement can greatly improve the odds for successfully implementing their Procurement technology. A clearly defined implementation plan will ensure that common stumbling blocks and mistakes are avoided and that the expected value will be achieved quickly.
1. Dedicated project team
We get it. Everybody is busy. And resources are scarce. Therefore, the inclination to ask people to invest 20% of their time for implementing this cool new tool is understandable but will leave everybody underwhelmed. A lack of focus will be detrimental to the cause and result in frustration and delays. A dedicated project team with a designated project lead is key for successfully implementing Procurement technology. The project team needs to be fit for purpose and have appropriate decision rights to drive the project forward.
2. Management sponsorship
While grassroot movements can be extremely powerful, technology implementations in organizations of all sizes tend to require a certain level of top management involvement and support to be successful. With Procurement digitalization being a big priority for many organizations, identifying and convincing a senior member of the Procurement Leadership Team to support the initiative should be a manageable task. Her involvement makes her accountable for the success and ensures the organization attributes the right level of importance and time to the matter.
3. Clear objectives
What cannot be measured, cannot be steered. Successful implementations start with a common understanding of what success looks like. It is therefore vital to have success criteria that are aligned with top management expectations for the investment into a new tool. KPIs should be SMART and easy to measure. This way, the project team can easily keep track of the implementation progress and adjust or escalate where necessary.
4. Professional Project Management Office (PMO) & Governance
We love it when a plan comes together. Having a professional PMO for the Procurement technology implementation will ensure that the implementation is progressing as planned. The project manager will create the implementation plan, establish clear roles and responsibilities, and track the completion of assigned activities. The PMO will also establish a governance structure that ensures key stakeholders stay involved and informed on the implementation progress, often via a Steering Committee. If no internal resources are available to run the PMO, external consultants with experience in technology implementations are a valuable investment.
5. Change management & communication strategy
Many organizations fail to inspire interest and curiosity in the new solution. A clear change management strategy can help to create awareness and alleviate potential concerns. Understanding the right communication channel and messaging for different stakeholder groups is important for creating interest and engaging individuals. Clearly communicating the added benefits and relevant use cases of the new technology for them can have a positive ripple effect throughout the organization.
6. Content development
Everybody has specific content needs. Based on the identified communication needs and content requirements, the project team needs to create relevant content that supports the adoption of the new solution. This can include info mails, templates, training videos, use cases or lighthouse projects. Ensuring content is relevant and applicable to the user is key.
7. Training & enablement
Implementing Procurement technology requires more than providing user training. Nevertheless, training and enablement is a key building block for successful implementations and for driving adoption. Training efforts should demonstrate use cases across a variety of spend categories, regions, or business processes simultaneously and be practically relevant instead of theoretic. Especially where category specific differences exist, running category workshops to highlight specific use cases or to create customized best practice templates can further reduce adoption hurdles and the perceived complexity of new tools.
8. Support infrastructure
You never walk alone. A clear support infrastructure that provides ongoing hands-on support and coaching can increase the willingness to experiment with new tools. Ensuring there’s a clear understanding of the available resources reduces fears of getting stuck when trying something new. The support infrastructure can consist of super users, a dedicated support team, the customer success team of the tool providers or specialized consultants.
To provide an additional perspective on how organizations can ensure a positive ROI on their tech investment, we spoke with Robert Waalder, former VP Procurement at Philips and Founder of Sourcing Champions. And while there are no guarantees in life, experience shows that organizations can significantly increase their chances of achieving their objectives by considering our 8 building blocks for successful Procurement technology implementations.