6 Lessons for Procurement Digitization

by Alex Saric

“If you want to make enemies, try to change something.” —Woodrow Wilson

Chief Procurement Officers stand at the precipice of change and taking the next steps towards Procurement innovation is going to require strong leadership and expert guidance.  Seeking to light the way on the journey, Procurement Leaders, Covéa and Ivalua joined forces on a recent webinar to inspire Procurement leaders as they boldly go where few Procurement teams have gone before.  Here are the key takeaways

1. Change does not happen by accident

Welcome to the new age of Procurement where we are ideally positioned to influence not only cost control measures but also to embrace top line growth ambitions and to drive innovation, powered by digitization.  Sounds great doesn’t it? BUT, technology is only there to empower innovators through their paradigm shift. Procurement digitization is the result of having innovative leaders such as Sylvie Noel, CPO of Covéa.  Strong leadership with the capacity to convince and rally the board is critical.  Those CPOs who will achieve and accelerate true transformation require a strong vision and the ability to build a strong team,  plot a complete journey and lay the appropriate groundwork, involving people, processes and technology.

2. There are 3 steps in the Procurement Digitization Journey

• Step 1: You are early in your journey and you want rapid time to value, quick deployment of best practices and the required high adoption by users and suppliers
• Step 2: You have arrived at Best-in-Class – digitize the full Source-to-pay process globally and bring all spend under management.  More stakeholders, more users = more resistance. Be prepared. Use your early successes to build support.
• Step 3: You have truly reached competitive advantage, not just digitizing processes and adopting best practices but actually bringing your team’s best ideas to life. This is where opportunities lie to grow revenue, accelerate product innovation and other truly strategic value areas.

3. Viability and Agility – not just nice words on a slide

All through the process you need to think about viability.  Will your technology partner stay with you through the journey?  Agility – will your technology partner leapfrog with you to get full ROI – this is what Ivalua is made for.  You need rapid time to value, but also flexibility to grow as you mature and your requirements evolve. We won’t force you to choose either supplier management, or source to contract, or procure to pay.   You will start where you need to and fix the most important problems first. You can quickly deploy best practices but tailored to your organization.

4. Start asking questions early & win fans among your users

Sylvie Noël says clearly that, technology is a powerful tool, but you need to know what you want.  She involved everyone who was going to be using or touched by the tool and proved the effectiveness of Procurement by working together, and by showing that by doing so, they got results.  This was led internally by a committed and agile team. In 2011 they had a proof of concept, resulting in the selection of Ivalua. That was followed by design workshops and in Sept 2012 they had a significant pilot involving 350 employees. In 2013 they went live. To succeed it is mandatory to involve as many end users as possible.  They interviewed all the people they were going to be working with, and looked at how they could be aligned with the strategy of the company. Procurement people are professionals but they have to be ready to listen – for example to marketing, to better understand users and to see the way they are working and sell the new way of doing things.  Adoption can stand in the way – stakeholders, suppliers and compliance can be tough. The right technology and approach drives adoption rather than resistance. Don’t forget about suppliers. Make sure you and the vendors both win and your technology is friendly to them as well.

5. Tips on how to deal with resistance

Show proof of better efficiencies and added value. Show that you can react quickly to find a better supplier than the one they are working with. Few are eager to accept a paradigm shift.  Most companies have resisted too long. Anticipate rather than react to user resistance. Kick off the project with end user experience in mind, including that of suppliers. You can deliver to the board, but change will not happen unless end users and supplier statistics are good.

Look inward and apply the ‘what’s in it for me?’ (WIIFM) rule. For each user what will this new solution tool bring to them?  Management WIIFM must be crystal clear – less clicks, less screens, cross cataloging, search web for best deals, Ivalua is a tool but what you get out depends on the company strategy and day to day better experience.  Have regular meetings with the users and do evaluations in the tool. Which improvements are needed by legal or for the vendors? Show the results and move forward with the next stage of innovation.

6. Data is the new fuel of your organisation

Data is the fuel of technology.  Companies have invested heavily to make data work.  There is a gap however, and this is where Ivalua can help.  The platform is built on a solid data foundation, with a single set of data tables across the full suite, and even has the ability to serve as your vendor or item master and synchronize with back end systems. This technical detail of the architecture is the difference between being able to have a true 360 degree view of suppliers or not, or for AI-powered digital assistants to access and leverage all information. When it comes to data, details count.

Sylvie Noël from Covéa is one of many Customers who will be taking part in our Ivalua NOW Conferences 10 – 12 April 2019, Paris and 29 April – 1 May 2019 Chicago.  We hope to see you there.

If you missed the webinar, and would like to listen to the replay, here it is.