We see three success factors for a value-adding and thus successful digitalization of procurement:
- Clarity objectives and relevant criteria for system selection.
- Realism, focus and openness in implementation.
- Measurable increase in value contribution through consistent system use.
But how? A roadmap.
Selection: Finding the right tool
Ineffective operational procurement, lack of transparency over the entire procurement process or poor supplier management. The system must solve the most pressing problems. However, the medium to long-term requirements for procurement are no less relevant. They decide on future viability of the solution and therefore belong just as much to the catalogue of requirements as acute issues. Screen the market with foresight and involve system-independent consultants. This objective view is important: it reveals underestimated risks, points out barriers in the course of the project and thus helps to set up the project right from the start.
Checkup: Do the processes fit?
Effectiveness and speed are the main drivers when it comes to digitizing procurement. The basis of every digitization project is good master data quality. Process quality also determines the ultimate benefit of the system. Poor, established processes are not improved by digitization. Nevertheless, processes are repeatedly transferred into digital solutions largely unchanged. However, a digital process that runs in the wrong direction cannot fulfill the goals associated with it.
First of all, you review all procurement processes in terms of strategy and function. If these do not fit together, redesign the processes. Once the processes are in the system, adjustments can only be made with a lot of effort and costly change requests.
Project start: Get everyone on board
A critical success factor for the entire project is close cooperation between IT, procurement and relevant stakeholders. Cross-functional exchange is important. The focus is not on departmental sensitivities, but on overall benefit for the value creation process.
This is often underestimated during planning: The decisions that management has to make about the implementation of the solution take time. Not infrequently, the time needed to make these decisions is significantly longer than estimated. An early buy-in at the decision-maker level or a sponsor who actively represents the project in management circles have proven their worth.
It will be necessary to break through supposedly established structures and processes. For this, the project team needs a clearly communicated mandate.
Rollout: Advertising for use
The system has been successfully configured and the first test run has worked! Congratulations! Now it’s time to learn to walk – step by step. Our recommendation: Decide for a phased rollout. Gain first system experiences with a manageable number of users to quickly improve and further optimize the tool in everyday life. The classic procedure looks like this:
- You start as a pilot with users who are open to new things. The experiences of the pilot users are decisive. They serve as a basis for optimization and are recorded in a structured way.
- They promote the system via success stories, report on the new processes and functions in procurement and thus counteract the initial scepticism (these opportunities are eliminated if all employees can use all functions across the entire product group tree from the first day).
Content is decisive for acceptance of the tool across the board. Which content of catalogues, suppliers, contracts and evaluations do users want to find? This phase is also important:
- Involve internal customers and, if necessary, some suppliers early in the process.
- Take up existing problems promptly and solve them with new functions and content.
- Collect positive feedback.
- Promote lighthouse projects.
- Arouse curiosity and overrule skeptics.
- Use the system as an enabler for procurement.
Gain momentum: Digitization as an enabler
If the new tool is used fully and consistently right from the start, the first results will quickly become apparent. In order to pick up speed, it is now a question of deriving the right findings from the increased transparency and data. If the procurement department establishes itself as the owner of the donate-related business processes, additional services will become necessary. The order of the day: Identifying requirements and proactively transferring them to goods and services catalogs.
As an internal partner for spend topics, innovations from the market, budgeting and analysis, procurement can establish itself as a key figure in the center of active players and networks. The core elements of this new role are
- Support in the form of RfX services and 1st level support,
- Release and rollout management,
- Catalog management and
- On- and offboarding of suppliers.
In addition, there is continuous optimization through improved framework conditions, processes and inventories as well as synergies, cooperation and sustainability.
Procurement is realigning itself. Enabled by boosting digital solutions and sophisticated processes. At last, procurement can fulfil its key role and contribute to value. The possibilities are now given.