In part 1, my colleague has discussed two of the top barriers to technology adoption in procurement. Continuing the series, I want to explore other common challenges preventing organisations from getting the most value out of digital procurement tools.
When people cite a lack of IT resources or funding, it signals a lack of organisational commitment to an initiative (Note: we are not discussing scenarios where businesses are struggling financially or are busy firefighting in an unprecedented crisis).
Digging further, there are two underlying root causes:
People resist organisational change because they think change is hard and often leads to failure. While there is some truth in such a belief, we are also wired to perceive failures more negatively than they really are.
“Adaptation is the rule of human existence, not the exception.”
Harvard Business Review
To overcome the status quo bias, whoever the “change champion” or “change maker” within the organisation needs to win the hearts and minds of budget holding decision makers.
If you are not competing with status quo, you could be competing with another initiative. Organisations often have various priorities so to ensure procurement technology is bumped up in the list, it’s best to adopt a two-pronged approach:
Let’s unpack the second point further.
If the organisation is busy implementing a full-scale ERP upgrade, taking on a major procurement suite rollout feels like a monumental task, both financially and technically. Hence, there is a high chance of pushback by other stakeholders such as IT.
Moreover, as Forrester’s VP and Principal Analyst put it, this may cause a vendor lock-in that is hard to escape. A more agile approach would be multi-sourcing specialist (best-of-breed) procurement solutions for specific needs.
Specifically for technology upgrade initiatives, there are 3 cards procurement can play.
> Action point: Evaluate the trade-offs for each option. Gather as much information you can get both internally (e.g. upcoming/planned IT projects) and externally (e.g. software vendors’ implementation plan). Come up with an irresistible proposal that clearly answers the question “Why this initiative?”
Interested in how to build a business case for digital transformation? Our webinar can help you.
As obvious as it sounds, there will be a need for change management if the change is drastic (e.g. switching from pure paper-based to digital processes).
Hence, IT projects shouldn’t be treated as “big bang” launches, especially if the appetite for change has been historically low within the organisation.
Taking a step back, there are things you can do to minimise the need for change management prior to implementing any procurement software.
Using the service design/design thinking approach, you can redesign processes and experiences around the users to increase the likelihood of technology adoption and decrease implementation risks.
Who are those users?
We have also touched on the service design approach in a previous post – where we summarised learnings from PASA’s ProcureTECH event.
When procurement considers the needs of various user groups, it also helps enhance governance, especially if organisations are transitioning towards the hybrid procurement operating model.
On the contrary, if technology is only treated as a bolt-on component, procurement would have a hard time enforcing policies and rules.
As we’ve written previously, users of business software are expecting consumer-grade user experience. With COVID-19 and prolonged periods of remote work, boundaries between work life and normal life might blur even more.
Between a new system that is clunky to use and the old familiar ways (e.g. Excel, paper), people are bound to opt for the path of least resistance. And organisations might soon find the “technology upgrade project” fall by the wayside.
What is the ideal? It’s a system that “puts the procurement power in the hands of the user, rather than the user being at the mercy of the system or a rigid and unnecessary procurement process.”
We hope that after this 2-part series, you have learned some key pointers that can help set your organisation’s procurement technology project up for success (if you’re in a pre-purchase stage) – or boost software uptake to achieve greater efficiency.
As always, if you’d like to have a chat about anything in this article or procurement technology in general, feel free to reach out.
We have seen many technological advances in the past few decades amid the “Industry 4.0” evolution, including the rise of digital transformation in many business areas, such as procurement and supply chain. However, there are still challenges in realising the full potential of procurement technology due to internal complexity, namely:
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Previously, we’ve discussed the typical stages of a digital transformation. In this next post, let’s talk through some of the different implementation approaches and their pros and cons, e.g. waterfall, agile, etc.
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