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Procurement technology – there are some luxuries you cannot afford right now

Procurement, Luxury
Covid-19, Blogs, Top Resources, Learning materials, Best Practice

If there is one positive thing that procurement professionals can draw from the covid 19 pandemic, it is that procurement has been thrust into the spotlight like never before. I have seen countless social media comments and articles that procurement is finally getting a seat at the table, and your voice is being heard.

If there is one other thing that procurement should focus on at this time, it’s taking the time to briefly pause, and using the situation to accelerate your digital transformation path. It is likely that procurement is being stretched now more than ever, and is fighting a losing battle if tools are not adopted to aid and assist in the fight. However, you need to be smart about the technology that you choose.

There seems to be an obsession within the procurement community that all systems must integrate with your chosen ERP provider or other technology solutions. If you’re looking to adopt tools and reap the benefits immediately, that is a luxury that you cannot afford, right now. There will be a costly, and lengthy implementation aspect that is going create challenges on 3 fronts:

1 – It is going to make getting approval for the business case much harder due to the increased cost
2 – The benefits are only going to be realised many months down the line and in some cases years.
3 – Justifying the ROI becomes much more difficult because of 1 & 2. Do you have the budget to invest in a six-figure investment that will take years to recoup the outlay?

We have heard countless stories who have opted to go with larger, legacy providers, which has meant a 6, 9, 12, or even 18 month implementation time before the system will be ready for use.

So, what’s the alternative? You need to be very smart about the types of tools you are looking at, with a particular focus on ‘out of the box’ solutions. This is particularly relevant for upstream activities, where the time to strike is while the iron is hot. Procurement is going to be tasked with new sourcing initiatives, managing contracts, onboarding new suppliers, and maintaining governance and control of the existing supply chain. This needs to be done today (perhaps in some cases yesterday) and it’s the modern, flexible SaaS providers who will be able to deliver on this.

May 15, 2020

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