Digital procurement transformation: How to bring your key stakeholders on board.
Does your organization need a better way to manage procurement? Are there huge time and money savings to be realized by moving away from paper or the clunky procurement module in your ERP to a purpose-built eProcurement solution?
No matter how compelling your reasons, you’ll need the support of senior management to make the change. Winning them over can be a challenge. But showing them how a dedicated eProcurement solution can help them meet both their needs and those of the wider organization is a vital step on the journey to more effective procurement.
Who are your key stakeholders?
It all starts with identifying the right people: the senior leaders you need on side to give your procurement transformation the green light.
Every organization is different, but your main stakeholders will probably be in three departments:
- procurement (if it’s separate from finance)
Each of these areas will be closely involved with any new procurement system: its selection, its implementation, and its use.
Understanding the needs of these departments and their leaders will help you develop a winning business case and build the support necessary to drive procurement change in your organization.
What do they want? What are their concerns?
There are many benefits to an eProcurement solution, but not all will be as relevant or important to each of your stakeholders. They will also have their own reservations and concerns.
Arrange a time to meet with your stakeholders and their key people face-to-face. This is vital in building trust and it will help you understand what they need and which areas make them uneasy.
It will also show them that you’re taking their team’s needs into consideration, which will make them more likely to support your proposal.
Let’s look at each leader separately.
The procurement leader
Unsurprisingly, the procurement leader will be highly involved in the selection of a new procurement system. In fact, they are often the ones leading the charge for procurement transformation. But that’s not always the case and they may just feel more comfortable with maintaining the status quo.
Your procurement leader may be concerned that greater automation will result in job losses and a smaller team. But this reduction in manual effort is an opportunity for a more strategic procurement approach, one which allows team members to focus on more value-add work such as getting the best value on big ticket items, closer supplier management, expanding your supplier base, and negotiating stronger contracts.
eProcurement helps procurement leaders meet some of their most important needs in the following ways:
- Automation offers the ability to optimize procurement and improve efficiency across the entire procure-to-pay process.
- It offers solid spend analytics that can identify opportunities to improve value from suppliers and reduce waste.
- eProcurement solutions have intuitive B2B marketplaces that make purchasing simpler, significantly increasing compliance.
The finance leader
Every Chief Financial Officer has a lot on their plate. Procurement is just one part of the puzzle, and they may not even consider it a high priority.
But cost management is a big part of the finance leader’s responsibility, and that’s where an automated procurement system becomes highly appealing.
The finance leader might advocate for managing procurement through a system they are already very familiar with — your organization’s ERP. But they may not understand how a dedicated eProcurement solution can better benefit both finance and the wider organization.
Some of the top advantages of eProcurement for finance leaders include:
- It aids expense management by providing visibility into historic and planned spend and by making auditing easier.
- eProcurement solutions can integrate directly with an existing ERP or accounting system, ensuring there remains a single master system of record for financial data.
- Automation means major time and cost savings can be realized.
- It can minimize the risk of fraud by standardizing the approval process.
The technology leader
Any major software project will involve your organization’s senior technology leader, and their support is crucial.
Your technology leader will have to approve your choice of platform and they will play a key role in its integration with your organization’s other systems. They may also be involved in the change management process.
Among their main concerns will be a drain on resources — how much time and effort will their team have to spend on the solution’s installation, integration, and ongoing maintenance?
Your technology leader will also be eager to ensure your organization gets value for money. They will have seen their share of software packages that over promise and under deliver and they won’t sign off if eProcurement doesn’t truly meet your organization’s needs.
These are some of eProcurement’s greatest benefits to your technology leader:
- A cloud-based solution requires no installation and all ongoing management is handled by the solution provider.
- As all suppliers are connected through the eProcurement solution, there is no need for time-consuming one-to-one integrations between each supplier and your ERP.
- It enables the standardization of technology buying across the organization and provides detailed oversight of all IT spend.
- Modern eProcurement solutions are fully compliant with security standards such as PCI and SOC 2.
Make your business case
Transforming your organization’s procurement process will almost certainly require a business case. It must show how the benefits, costs, and potential risks of a new solution will result in a net gain for your organization.
Your business case is also an opportunity to show your key stakeholders that your proposed transformation will address their needs, minimize the impact on their teams, and provide long-lasting value for the entire organization.
Our eBook, How to make the case for eProcurement, provides a step-by-step guide to kickstarting your digital procurement transformation. In detail, it explores how to:
- Get buy-in from key stakeholders
- Build a compelling, evidence-driven business case
- Counter common arguments against procurement change.
January 25, 2023
The 5 essential parts of an eProcurement business case.
November 30, 2022