IT - Procurement’s Best Friend
Procurement Trends, Source-to-Pay, E-procurement
This blog is a follow-up to a recent webinar (titled: Procurement & IT are Partners in Source-to-Pay) which featured a conversation with Mika Turunen, our Chief Architect for Source-to-Pay.
I didn’t really know what to expect from that conversation. Sure, I knew some conversational outlines because I had prepared them as a means of guiding our dialogue in a structured format but we hadn’t rehearsed or scripted anything, so I can honestly say I learned a couple new things from the 45 minute conversation.
First, if you don’t know Mika, you should check him out on LinkedIn. He’s got a solid background as an innovator and forward thinker. He’s worked for very large companies and some small ones. He’s been a public speaker to very large events and you can tell that he knows what he’s talking about and it’s also clear that he has stylistic opinions on IT’s role and his own role as a Chief Architect.
Involve IT Early
The first point Mika raised which I wanted to touch on in this blog is within the context of IT involvement in the IT system or solution procurement. Now, obviously you’re thinking 'of course they are involved, it’s software/hardware that’s being bought.' And sure, you’d be right in thinking they should be involved but as you know, the buying process for an enterprise solution could easily take 6-18 months or longer. I didn’t know the right answer as I’ve been spending most of my career selling into procurement teams with IT as a stakeholder and more often than not, a stakeholder with veto power but possibly not a strong opinion other than a critical one. Mika’s advice is to involve IT as early as possible into the conversation.
Get IT involved early and two things will happen. First, IT will feel a stronger sense of ownership and will become a much more proactive element of the purchasing team, offering advice, solutions and potentially highly useful information. The second thing that will happen is that you will avoid a more critical reaction to the overall project. Bring them in late and they may feel there are just too many things to consider at once. Remember, their safe place is with the ERP, so they may just feel overwhelmed and become overly critical and generally, less a 'part of the solution'.
Identifying Value Streams
Possibly the most eye-opening part of our conversation revolved around the concept of 'value streams’' It’s not that we’ve never heard of the concept as it relates to either agile development or material and information flows for lean - it’s a classic. And yet, we often forget the basics in our rush to accomplish the goal right in front of us. The key here is to look beyond the process in focus (operational procurement, for example) and rather, look for the elements of that process from which value is derived. Within operational procurement, you have the classic requisition to order workflow. This may be something in your organisation which doesn’t work too well and so you put together a project to improve it. This is your opportunity not to simply find a solution that accomplishes this but to look peripherally at the elements within this discrete process which generate value to either the customers or the users.
IT is a great stakeholder to work with here because the IT remit includes the facilitation of broad collaboration and collaboration is a huge value-generator. IT is the gatekeeper for all external third-parties who might want to connect with you digitally and clearly, within source-to-pay, you need your suppliers as close as possible. Value streams could be related to the time it takes you to onboard a new supplier or the automation methods you use to validate and approve supplier catalogs for inclusion to your shop. If your process includes MRO, you may need more of a real-time collaboration with your suppliers in order to ensure you get what you need, even when you don’t know exactly what that is. You will need IT onboard to help you create the connections, do the mapping, make it all secure and give you suggestions for improvement within the process that you may never have considered.
Value-stream mapping is definitely going to be important to any organisation who is digitally transforming their business. Get IT onboard early and don’t be surprised when these clever guys and girls start thinking outside of the box, giving you ideas to improve your process beyond just the same sh*t moving faster.
That’s enough for this blog, see you next time.
Rowan has more than 10 years of experience in the purchase-to-pay arena. During this time, he has managed the go-to-market for a diverse set of portfolios including Accounts Payable Automation, B2B Networks, Financing Services, eProcurement and Product Information Management.
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