How to make the case for procurement technology investment: Expert practitioners share their tips

Buying procurement technology

花费很重要333manbetx 提供有用的基准,当公司已准备好识别采购技术提供商以支持其采购业务流程, and ournew TechMatch℠ toolcan get you a shortlist fast. But before you get to this point, you must successfully make the case for investment within your organization, and that’s a major hurdle for many.

John Proverbs, Head of Procurement at the semiconductor firm KLA Corp., says there’s actually a critical step to success that is often overlooked: to embed procurement technology investment into the overall strategic IT roadmap of your organization. Set a long-term vision for the procurement organization at large. Identify what tools and systems you’ll need for the future. Request resources as part of the company’s overall technology strategy instead of on a one-off basis, and the IT function will become an ally.

This tech-selection article is actually one offering in Spend Matters' new 5-step "Guide to Buying Procurement Tech." See the full guide here.

每家公司都有IT计划流程。了解IT路线图是如何确定并遵循所定义的过程,以计划和资助未来的采购技术。您仍然必须与其他程序竞争,但您将在桌面上座位。您将定位采购/供应链作为具有系统投资规划的合作伙伴。

Alan Rice, VP Global Procurement at Primo Water Corp., reminds us that technology is just an enabler of procurement and CPOs must approach it as such. First, build an organization with the right goals, people and processes — then determine how technology can offer support.

Alan stresses the importance of assessing organizational maturity first, before you make a case for technology investment.

“采购群体由差距或目标驱动,他们需要创造该桥以达到目的地,”他说。“您需要通过关键指标在大型指标中基准测试您的采购组织,例如:您的采购组织的投资组织的ROI是多少?每个采购FTE(全职员工)的投资回报率是多少?这与其他同类花费和尺寸的组织进行比较?您在管理层的支出与总费用如何?识别采购的成本,你带到桌面的内容以及你应该是支持企业总体目标的职能。“

托马斯Wiemer计算机网络公司瞻博网络的数字采购转型领导者表示,ROI是试图决定购买什么技术的公司的关键因素。

“The CFO continues to be challenged by the investment ‘payback’ in procurement technology, especially when it’s aimed at integrating the ‘user experience’ for employees and suppliers,” Wiemer said.

以他的经验,大多数公司仍然很传统的itional in terms of financial calculations requiring either a headcount reduction or the decommissioning of existing tools to approve an investment. As a practice leader, Tomas finds this approach unsatisfying because it fails to consider the user or supplier experience.

“许多公司谈论数字化,但他们只有25-30%的数字计划,70%仍然开放,”Tomas说。然后,您必须进行投资,但特别是在采购中,可能很难在功能开放访问和供应商创新的功能上。

So, how do you set a long-term procurement technology vision and “make the case” for investment?

知道与市场相比,你的立场的关键是:你的竞争对手在做什么?什么是最好的?您的客户如何高级先进 - 他们的供应商需要什么?今天和明天的监管环境的影响是什么?是什么花费很重要, Hackett, CEB/Gartner predicting? Mapping your comparative position and taking strategic factors such as regulations and customer requirements into account are key to get the buy-in from your company’s leadership and even your shareholders.

In terms of developing a business case in advance of investment, it will require a “reasoned guestimate” — What will a solution cost (annual subscription, implementation costs), do you need an implementation partner, what does the implementation and possible data migration process entail? You’ll need to put a hard-dollar estimate on the expense side. Other than deriving investment information through industry, technology and provider research and doing the math based on your company size and number of technology users, networking is a key element of the process. Besides attending relevant conferences and networking events, consider joining or establishing a local cross-industry networking group and engage in conversations with your key customers to get a sense of their internal procurement processes, recent technology investments — and their achieved hard and soft benefits.

Now you need to sell the upside of making an investment in procurement technology. Many companies make the mistake of focusing primarily on achieving incremental savings — but executives know that well will go dry in time. So you also need to think beyond ROI, even though it’s important. Also sell the investment around efficiencies, effectiveness, compliance and risk management improvements.

约翰表示合同生命周期管理提供了一个很好的例子:“考虑CLM:这对ROI更少,更多关于管理大多数公司的风险和合规性,因为这些人成为董事会级别的关注,”他说。“强大的论点可以是技术将释放资源,以进行核心采购责任 - 而不是其他(非采购)责任,而且更具战略/不那么战术活动。”

He warns that, although it’s good to include cross-functional benefits in a business case, you should not base your case on the benefits for other functions. Instead, focus on what you, as a procurement executive, can control and deliver upon.

约翰还鼓励与所有采购投资项目的财务和审计协调,而不仅仅是利益攸关方。金融关心。它拥有控件并希望最大限度地减少风险。由于您的倡导者获得了良好的成功。

Beyond direct resource requirements and benefits, also be sure to have a solid understanding of the implementation timeline, how to drive adoption/required user training and maintenance needs going forward. Companies can be especially cautious to invest in new technology if they have previous experiences of poor user adoption. Having a solid implementation and user adoption plan can remove such reservations.

Jamie Crump, President of The Richwell Group, a management consulting firm, said making the case for a technology purchase requires meaningful data and a meaningful understanding of how your company does budgets for projects like this.

“提供商表示,一项技术将为您提供10-70%的任何地方 - 这并不有帮助,”她说。“如果您寻求对采购技术的投资,您将首先必须确定您公司的资助流程 - 这似乎很明显,但这通常忽略了一步。资金流程可能对所有公司不同,但总有一位高管签署投资和高管签署事实,数据和数字。如果您可以提供这些,您可能会签下签名。我给出了很多比率:“对于你给出的每一美元,你会回来$$$。”这些可以由直接节省,精简等组成“

要获取此信息,杰米表示您首先需要稳固地了解您的业务。

“Don’t look at a Spend Matters before you do your homework: You need to know what you are spending and how — being able to validate where we are (needlessly) hemorrhaging $$$$ a year.”

Frank Callaghan, SVP Sourcing and Procurement at the real estate firm CBRE, advised to get the executive team on the same page before buying technology. “It’s important to align all affected internal stakeholders when investing in enterprise-wide procurement technologies,” he said. “It can’t be determined solely by the biggest spend in the room. It needs to be a collaborative conversation.”

Frank also mentions that you need to identify what kind of customer you are to ensure selecting a right-fit provider. For instance, it’s revealing to think about your risk tolerance: Can you afford to work with a bleeding edge provider where you can expect a range of outcomes/performance with an eye on the bigger prize, or do you need a proven leader offering solid but hardly disruptive functionality?

Tomas说的另一件事是从Go-Go开始的事情,是兼容性。他建议在RFI上投资,以确定可以与现有IT基础架构集成的技术。

“Otherwise you may end up with 3-4 options on paper but integration challenges may do the provider selection for you,” Tomas said. “Most companies take shortcuts when developing the RFI. It’s assembled in a week just to get a sense of the market. Then they move forward only to struggle later on in the process because of incomplete information and false assumptions.”

Whether you’re in the market for a source-to-pay suite or any stand-alone solutions in between, Spend Matters’ 5-step guide can help you along the “digital procurement buyer’s cycle.”

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