Build a Solid Case for Procurement Transformation
Ready to kick off your next digital transformation project? Before diving headfirst into the design, building a solid case for the changes you want is essential. Gaining the buy-in and support of key stakeholders is a critical step that sets the stage for successful outcomes. Here, we explore key tips and strategies to effectively build your case for change, ensuring your project gains the necessary traction and support it needs to thrive.
Assess the Risk
Take a moment to evaluate the organizational and cultural landscape. Are there other projects competing for attention? And most importantly, do you have a supportive leader cheering you on? Addressing these questions head-on will pave the way for a smoother journey and ensure your transformation efforts receive the backing they deserve.
Get started by thoroughly assessing the current state of your organization, processes, and systems. Identify the risks, challenges, and limitations that require a change.
Identify Your Objectives
Envision what you want to achieve for your company or the specific area needing change. What are your objectives? And how will the proposed change help you achieve them? Think about the opportunities for improved efficiency, cost savings, or creating a better customer experience. Communicate the benefits to your organization and stakeholders. Paint a picture of what that transformation will look like.
“Design with the outcome in mind instead of just the delivery. What are you trying to accomplish here?” advises Conrad Smith, CEO of Graphite. “The tools should enable the outcome that matters to you—the business outcome, the goals, the vision, all of that needs to be clear.”
Define Your Success Metrics
Establishing success metrics is crucial for a well-rounded strategy and keeping your eyes on the prize. It’s not just about ROI; it’s about assessing the metrics that align with your core business objectives. Take a step back and evaluate your procurement operation and team. What are the two or three outcomes that matter most?
Invest in projects that improve those outcomes. These success metrics will serve as your guiding light, showcasing your progress to stakeholders and helping to manage expectations. They will also drive your project activities to ensure a focused and impactful transformation.
Remember, success metrics go beyond financial returns. They encompass the holistic value your new technology brings to the table. So, take the time to define these metrics.
Examples of Success Metrics
Depending on your objectives, you can use a myriad of success metrics. A few include:
- Average cycle time of purchase requisition to purchase order (P2P)
- Net promoter score
- Spend under management savings
Amanda Prochaska, Founder and Chief Executive Officer at Wonder Services, recommends focusing on four to six metrics at most.
Be Aware of How Metrics Drive Behavior
What you’re measuring can have a significant impact on behavior, too. That’s why it’s so important to carefully consider the metrics you use to be sure they’re driving the right actions.
For instance, Prochaska’s organization created a metric to measure the cycle time between making a purchase requisition and the purchase order. But here’s the catch—automated transactions weren’t included in the metric. This meant that if they bought from a catalog within someone else’s cycle time, it didn’t count.
Excluding these automated transactions discouraged buyers from using the catalog. When they changed the metric to include automation, buyers were motivated to buy from the catalog again. This simple change streamlined the procurement process, providing pre-negotiated options, standardized pricing, and electronic purchasing.
When you’re setting metrics, think about the consequences and consider how they might shape behaviors. Remember, what gets measured gets done, so choose wisely!
Leverage Smart Project Management Principles
To achieve project success, procurement teams must leverage effective project management practices rather than relying on guesswork. Consider these best practices to enhance your procurement team’s project management capabilities and achieve better outcomes. By investing in smart project management principles, you can avoid the pitfalls of “winging it” and pave the way for project success.
Get Leaders on Board
According to Smith, actively involving a leader is a significant factor in determining a project’s success. So, from the get-go, engage key leaders and decision-makers.
Prochaska shares some eye-opening insights, saying, “Ninety percent of the time when people reach out to us and say, ‘This didn’t go well. The technology isn’t working for us, or it wasn’t adopted,’ one of the main reasons is because the leader wasn’t truly involved.”
Why is leader involvement so crucial?
Assess Your Skill Set
Although digital transformation is crucial for procurement, many professionals need more skills and resources to execute it effectively.
Perhaps it’s the fear of the unknown or feeling overwhelmed. Questions like “What if something goes wrong?” or “How do I handle integration issues?” start popping up.
Prochaska offers wise advice: “As a leader, it’s really smart to think about your skill set. Do you have what it takes to navigate this transformation? And if not, consider creating a role specifically for that purpose and hiring someone with the expertise to fill it.”
Build a Team of People Smarter Than You
When building your dream team, surround yourself with individuals who are not only talented but also smarter than you. Seek out team members who bring fresh perspectives, innovative ideas, and a thirst for knowledge to the project. Be bold and look beyond your immediate circle and consider people from other teams or with experience in similar projects. Consider bringing in team members with a digital transformation background, even if they don’t have direct procurement experience. Their expertise can complement your skills and knowledge of the company.
Recognizing the gaps in your team and taking proactive steps to fill them is crucial for success. It’s tempting to stick to what you know and avoid confronting the areas where you need additional talent or training. But Conrad Smith advises a different approach. He suggests asking yourself, “Where do I need more talent? Where do I need more training?” Then, invest in yourself and your team to bridge those gaps. Instead of retreating or staying in your comfort zone, be the forward-thinking leader who keeps pushing things forward.
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