Digital Transformation in Procurement: Navigating the CPO's Crucial Decision
Technology is transforming procurement, and one of the highest profile strategic actions for a CPO is ensuring that the procurement function has precisely the right technology. CPOs tell us of frustration at digitization projects that take too long, cost too much, and produce disappointing results.
Often solutions are implemented but users fail to adopt them, or scaling up across the entire procurement organization simply takes too much time and effort. With hundreds of procurement technology solutions on the market, from full suites to niche tools, technology selection and implementation becomes one of the most important decisions for any procurement leader.
The challenge of selection and implementation
When it comes to selection and implementation, companies from all industries face different challenges.
- What do I want to achieve with digital procurement tools, and which processes should be mapped digitally?
- What solutions are available on the market?.. and what are the costs?
- Does the investment pay off in terms of efficiency gains and savings?
- How can the solution be integrated into the existing IT landscape?
- Can the solution be adapted to future challenges / structures?
- How can the requirements of data protection and data security be met?
- What are the costs during implementation and operation?
The lessons of selection
One of the most common pitfalls is selecting a tool that solves only one pain point. Solutions are often selected without a holistic, end-to-end process perspective. This leads to low ambition, and consequential low adoption and low impact. The same poor outcomes can also be caused by selecting procurement technology based on its functionality, rather than the value that it can create.
Compare that with an approach that transforms entire end-to-end procurement processes, and then selects a solution based on the benefits that can be delivered. And, not just for the procurement function, value for the entire organization.
The value of digital procurement expertise
It pays to take advice. Our H&Z tech consultants, with their profound understanding of the procurement software landscape, utilize design thinking and agile methodologies to pinpoint precise software requirements. Our comprehensive approach considers both the procurement and IT perspectives.
In the selection phase, our selection support process follows a 360° logic, ensuring an unbiased and neutral system selection. We provide full support during the tendering process, including contract negotiations with the chosen software provider, to help you achieve maximum impact for lowest cost.
Points to consider as you embark on your digital transformation journey:
- Think big. When implemented well, technology has the power to transform the value that procurement can bring to an organization
- Prepare. Processes and operating models should be mapped and optimized. There is little benefit in digitizing problem processes
- Select the right technology. Focus on value, not functionality. Maximum impact for lowest cost
- Invest in implementation. Delivering benefits depends upon scaling-up