#8 Lack of Systems – Top 10 Reasons Why Procurement Fails
#8 Lack of Systems
• Cumbersome, Manual Processes and Systems
• Build a Roadmap and Prioritize
• Keep it Simple Stupid (KiSS)
Coming in at number 8 in the series of the “Top 10 Reasons Why Procurement Fails”, is “Lack of Systems”.
All too often Procurement teams are left cobbling together spreadsheets or manual, disparate systems and processes. To deliver professional and quality procurement services, mature Procurement organizations often have simplified and clear repeatable and sustainable processes that are well documented and understood by the entire team and critically, their business partners. Underpinning great teams is the procurement technology that enables great teams to deliver great service and solutions.
Cumbersome, manual processes and systems
In a previous article; ”3 Reasons Why Procurement Transformations FAIL” I touch on the critical role People, Process and Systems play in Transformation. At the risk of repeating myself I draw from that article as it is relevant here as well. Processes are there to help Procurement Professionals (Pros) and their internal partners know what to expect from each other. It’s like setting “Rules of Engagement” and creating a tool kit so that every partner experience is a positive one, is repeatable and is sustainable. I’ve seen great teams thrown together, each pulling from the tools and experience they had outside the company only to create confusion and dissatisfaction from the internal partners, as each time they engaged with Procurement it seems the process and thereby their experience was different. Create a standard methodology and process and you not only help the Procurement Pro deliver their best, you provide comfort to the internal partner that they will get what they want and have come to expect from the Procurement department.
Build a roadmap and prioritize
Almost without fail, the Procurement team is left cobbling things together manually for lack of systems. Systems are the critical tools necessary to have a lean and efficient Procurement Department. I’m not suggesting you run out and invest in an all new and expensive Source to Pay (S2P) system, no, but you do need to have a road map for those systems to be implemented that aligns to the maturing and evolving team, starting with the most critical; Initiative Management and Purchase Order systems. Initiative Management (or Project Management), for many is a spreadsheet of ALL initiatives that the Procurement Department is responsible for. It helps you keep track of and prioritize those projects that are most critical and balance the workload among the team. Beyond the spreadsheet, I’ve used Salesforce, Ariba and others and all are easily configured to manage Procurement Initiatives. A PO system is also a basic and foundational tool that is critical. You need a tool that has a front-end requisitioning component (Shopping Cart) and workflow approval so that the PO’s can be approved by the functional manager and finance. Ariba, Coupa and others all have great PO tools in fact the entire suite of Source to Pay (S2P) tools but there is no need to implement them all at once.
Start with the most critical, build your road map and implement new tools as and when needed. Note, don’t just implement tools from your ERP system which Finance most often dictates, just because it’s part of the software suite. That is absolutely a recipe for failure. Without the right tools you will end up hiring an army of procurement people who offer no value other than running PO’s around for signature.
Keep it Simple Stupid! (KiSS)
Forgive me but until and unless you can master the basics, don’t try to implement Block Chain or Artificial Intelligence (AI). I know you’re thinking, ‘but it’s cool and everyone is talking about it’. Yes, it’s cool and yes, it’s where you need to get to, however, you need to get the basics down first before you start investing in systems and technology that is well outside your means and level of sophistication. Understand it and how it can help your business. Include it in your roadmap as part of your plan but realize there are foundational things like being able to track and report on projects, ordering products on a shopping cart that can’t be solved with Block Chain or AI. Read “Preparing Your Business for the Digital Supply Chain” by Mike Mortson at Supply Chain Game Changer.
In summary, beyond the right talent, even the best will fail without a solid foundation, which is about building the foundational basics needed for success; create repeatable, sustainable processes that can be easily followed and understood by Procurement Pros and internal Business Partners alike. Create a technology roadmap of systems, implement the critical ones needed to support the team while having a plan to evolve and grow your sophistication overtime as your business and your team matures. Set your company and team up for future success.
Need help creating a P2P Roadmap or considering implementing one or more systems? ProcurePro Consulting helps eliminate the confusion and anxiety. We’ve got you covered. Contact us today for a free, no obligation consultation by email to firstname.lastname@example.org, telephone 416-505-8698 or for more information on ProcurePro Consulting checkout our website www.ProcurePro.ca